Since yesterday until now, US Dollar still at the level of IDR 15,000 per Dollar

News24xx.com - United States Dollar (US) finally re-penetrated the level at IDR 15,000/dollar. Quoting Reuters trade data, Tuesday, October 2nd 2018, US dollar was at IDR 15,001 this afternoon, and closing in the afternoon at IDR 15,049

 

Looking back on the last three months, the rupiah has depreciated several times, and at the beginning of October 2018 it reached 7.6 percent.

 

Previously Finance Minister Sri Mulyani Indrawati said the US dollar exchange rate, which almost touched IDR 15,000, was influenced by global conditions. Starting from increase in US interest rates on the Fed's monetary policy, to the influence of the US trade war.

 

As a result of various policies from the US, the circulation of US dollars is limited. This is what happened in Indonesia and caused the supply of US dollars in the country to be reduced.

 

Minister of Finance said, there were at least two causes of the weakening of the rupiah exchange rate which penetrated the level of IDR 15,000 per US dollar.

 

First, market feels the BI 7-day Reverse Repo Rate's benchmark interest rate is not attractive enough to be an incentive for investors to "hold" the rupiah even though Bank Indonesia decided to raise the benchmark interest rate by 25 basis points to 5.75 percent at the Bank's Board of Governors Meeting Indonesia on September 26-27 2018.

 

"If calculated from the lowest level, Fed has raised interest rates to 200 bps. Meanwhile, BI has only 150 bps from 4.25 percent to 5.75 percent. This means that more attractive interest rates are needed" he said, Tuesday, September 10th 2018.

 

The second factor was the increase in global oil prices which gave negative sentiments to Indonesia's fiscal conditions. "Now the price of Brent oil has reached 83 US dollars per barrel, far exceeding the assumption of the APBN oil price at the level of USD 48 per barrel" he continued.

 

According to him, rupiah will tend to be stable at the level of IDR 15 thousand by the end of this year if the monetary authority again raises the benchmark interest rate and the Government can immediately halt imports, so that the current account deficit can be reduced below 3 percent of Gross Domestic Product.

 

 

 

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