Rupiah Closes Stronger at Rp16,260 per US Dollar Today

TEMPO.CO, Jakarta - Rupiah closed stronger by 40 points today, Wednesday, July 31, 2024, at Rp16,260 per US dollar, in contrast to yesterday’s Rp16,300 per US dollar. 

Director of Laba Forexindo Berjangka, Ibrahim Assuaibi, said traders shifted away from the US dollar in anticipation of the closing of the Fed meeting. The central bank is widely expected to keep interest rates stable. "However, the focus will be on potential signals of interest rate cuts, following some weak inflation readings and dovish comments from Fed officials," Ibrahim said in his routine analysis.

In addition, tensions rise in the Middle East after Hamas leader Ismail Haniyeh was killed in Iran on Wednesday. Haniyeh was killed a day after Israel claimed to have assassinated a senior Hezbollah commander in an airstrike in Beirut on Tuesday, in retaliation for a cross-border rocket attack on Saturday.

In Asia, Purchasing Managers' Index (PMI) data showed China's manufacturing sector shrank for a third straight month in July, while non-manufacturing growth slowed. The data came after China's Politburo (Political Bureau) meeting where the government pledged more stimulus measures, especially to boost consumer sentiment.

Domestically, rating agency Standard & Poors (S&P) has again maintained Indonesia's Sovereign Credit Rating at BBB, a level above investment grade, with a stable outlook as of July 30, 2024. S&P believes Indonesia's economic growth prospects will remain solid with external resilience and a manageable government debt burden. Credible monetary and fiscal policy framework supported the growth.

S&P projects that Indonesia's average economic growth over the next three to four years will remain around 5 percent. The economic growth projection is driven by strong domestic demand, as well as increased government spending and private investment.

Meanwhile, external sector resilience is expected to be stable at a middle range supported by increased exports.

In general, S&P believes the new government will pay close attention to aspects of policy sustainability to maintain credibility and avoid significant economic and financial disruption. S&P previously maintained Indonesia's Sovereign Credit Rating at BBB with a stable outlook on July 4, 2023.

ANNISA FEBIOLA

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