Rupiah Potentially Weakens After Eid Holiday, Observer Alludes to Middle East Conflict
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Editor
16 April 2024 12:30 WIB
TEMPO.CO, Jakarta - Money market observer Ariston Tjendra believes the rupiah will potentially weaken against the US dollar on the first working day after the Eid holiday. He said the US dollar index is currently moving above the 106 range.
"During the Eid holiday, [the dollar] was in the range of 105 and before Eid in the range of 104," he said when contacted on Tuesday, 16 April 2024.
According to him, several factors have fuelled the recent strengthening of the US dollar. Among other things, sentiment on the delay in cutting the US benchmark interest rate and the current rising tension in geopolitical conflicts.
Ariston explained that the US consumer inflation data in March was higher than market expectations. In addition, the conflict in the Middle East, especially Iran's direct counter-attack on Israel, raised tensions in the region. The escalating situation also invited market concerns about the emergence of a new war.
Ariston said the war could cause supply disruptions, increase inflation, and trigger a global economic slowdown. Thus, market participants move out of risky assets and into safe assets. This also prompted the strengthening of US and gold prices as safe assets.
Ariston also explained that China’s potential economic slowdown will influence the global economy. Therefore, he assessed that the rupiah will weaken today towards 16,000 against the US dollar.
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