The Rupiah exchange rate was once more depressed to around IDR 16,200 per US Dollar. Senior Portfolio Manager, Equity, PT Manulife Asset Management Indonesia (MAMI), Samuel Kesuma, said that the weakening of the rupiah exchange rate was more due to global factors.
One of the current focuses of Bank Indonesia (BI) is also appropriate, namely efforts to stabilize the exchange rate.
“This is what makes BI still maintain its benchmark interest rate unchanged,” said Samuel, Tuesday (23/4).
BI continues to strengthen its policy mix to maintain the exchange rate through intervention in the currency market and purchasing SBN in the secondary market which is also expected to support the bond market.
“If the current exchange rate volatility proves to be just a temporary spike, our projection for the Rupiah exchange rate at the end of the year is in the range of 14,900 – 15,300 per US Dollar,” said Samuel.
Meanwhile, regarding the stock market, he said that in the midst of the current dynamics, we should be grateful that Indonesia’s economic growth momentum is still maintained.
Also read: Keep Inflation, BI Maintains Molded Interest Rates
Since December 2022, the Consumer Confidence Index has been stable at above level 120, while the latest manufacturing sector index is at the highest level since November 2021, and retail sales data since December 2023 has gradually consistently turned positive.
“Continuing recovery makes BI estimate that Indonesia’s GDP can grow in the range of 5.1% in 2024,” said Samuel.
Positive economic momentum amidst low stock market valuations actually opens up opportunities for investors who want to invest early, taking advantage of the transition from an era of high interest rates to more accommodative interest rates.
Also read: US Dollar Strengthens, Minister of Finance: Rupiah Stability Remains Maintained
Several catalysts that are expected to support more sustainable positive sentiment are the release of company performance for the first quarter of 2024, including the company’s direction and outlook for the future post-Idul Fitri, liquidity normalization in line with monetary easing plans.
“As well as economic policies and prospective new government cabinet members to predict the direction of future medium-term economic growth,” said Samuel.
The strategy amidst the current dynamics is to focus on issuers and sectors with good bottom-up fundamentals and which are relatively little affected by short-term volatility in global macro expectations.
The telecommunications sector has attractive prospects going forward. Even though there are concerns regarding worsening competition in the industry, telecommunications issuers stated that they would continue to focus on profitability as the main goal. The defensive characteristics of the telecommunications sector are also an added value in the current market situation.
“For the theme and potential for structural growth, we still maintain sectors related to raw materials related to the new renewable energy industry. The transition to the era of decarbonization benefits Indonesia which has abundant commodities needed in new renewable energy technology,” said Samuel. (Try/Z-7)
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