Rupiah weakened to the level of IDR 15 thousand per USD, triggered by these 5 causes

News24xx.com - The rupiah exchange rate weakened again against the US dollar. In the last few days the rupiah against the dollar has penetrated the figure of Rp. 15 thousand. And again strengthened, at the opening on Friday (09/09/2018), the rupiah exchange rate was at the level of 14,875.80 per US dollar.

There are several causes that make the value of the rupiah continue to decline from August to September, explained from a senior economist, Kwik Kian Gie, namely:

1. Trade balance deficit

One of the causes of the weakening of the rupiah was due to a deficit in the trade balance. Based on existing data, Indonesia's trade balance actually had a surplus in March to June 2018. However, on an annual basis, our trade balance deficits as much as 1.02 billion US dollars.

2. Trade performance that is less than optimal

Domestic trade that is less than optimal makes the rupiah continue to weaken against the US dollar. This condition was also caused by the first cause, namely Indonesia's trade balance which experienced a deficit and then affected the current account deficit. But this does not only occur on the rupiah but against currencies from various other countries.

3. Yield Spread

The increasing yield spread between US Treasury or US government securities and 10-year tenor Government Securities also contributed to the weakening of the rupiah. Bima Yudhistira, as the researcher of the Institute of Development for Economics and Finance, said that the wider the yield spread, the foreign investors will tend to sell Indonesian bonds.

4. Banking system and trade war

According to Shanti Rachmand as President of ASEAN International Business, there are 2 more things that make the value of the rupiah plummet. First is the inadequate banking system infrastructure. And the second is the trade war or trade war which is alleged to worsen global financial conditions.

5. Argentina crisis

On August 31, 2018, Coordinating Minister for Economic Affairs Darmin Nasution said that the crisis in Argentina was one of the causes of the weakening of the rupiah. Argentina has just received an injection of 50 billion US dollars from the International Monetary Fund or IMF, UN agency. But the capital outflow of Argentina is still dying so the interest is raised to the level of 60 percent.

As a result of this, a number of exchange rates in Southeast Asia weakened.

 

 

 

 

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