TEMPO.CO, Jakarta - Analyst from Binaartha Sekuritas Muhammad Nafan Aji Gusta, said that Bank Indonesia (BI) does not have to increase its 7 Day Reserve Repo Rate in relation to the recent decision made by the United States Central Bank, the Federal Reserve, which decided to increase its interest rate.
"It should not be a problem as long as the Rupiah exchange rate remains stable. When the Rupiah remains stable, I think BI does not need to increase its 7 Day Repo Rate, because in May, it has experienced two increases," Nafan said on Thursday, June 14, 2018.
Nafan asserted that BI will have to increase its interest rate when the Rupiah exchange rate against the US Dollar has reached 14,120.
In Bank Indonesia official website, the Jakarta Interbank Spot Dollar Rate (JISDOR) recorded that the Rupiah exchange rate against the US Dollar during the closing session on June 8, 2018. is at a level of IDR 13,902. The number shows a 34 points decrease compared to the previous rate of IDR 13,868 during the closing session on June 7, 2018.
Meanwhile, the BI 7 Day Repo Rate is recorded at 4.75 percent on May 30, 2018.
Nafan said that the Fed’s interest rate increase should provide positive sentiments for the US Dollar. However, the market is currently waiting for the European Central Bank where Mario Draghi will release his statement. The market is currently speculating that Draghi will leave the quantitative easing program in an effort to increase economic growth in the European Union.
"Euro will experience an increase, while the US Dollar will not," Nafan said.
MUHAMMAD HENDARTYO