AT the end of the week trading, Friday (23/8), the rupiah currency closed 108 points stronger than the previous close to IDR 15,492 per United States (US) dollar.
Director of PT. Laba Forexindo Berjangka Ibrahim Assuaibi revealed the main factor of the strengthening of the Garuda currency was the weakening dollar index. “In the weekend trading, the rupiah currency which had previously weakened, closed up 108 points,” he said in an official statement, Friday (8/23).
Ibrahim explained that investors were worried about the weakening economy and expectations that the US Central Bank, the Federal Reserve or The Fed, would soon cut interest rates.
Traders, he said, will focus on remarks by US Federal Reserve Chairman Jerome Powell for fresh clues on the size of the interest rate cut expected in September and whether further rate cuts are likely at each meeting thereafter.
“The minutes from the Fed’s July 30-31 meeting released showed that most officials said a September rate cut was likely,” Ibrahim said.
From internal factors, the strengthening of the rupiah occurred after the decision of the Budget Committee of the People’s Representative Council (DPR) to cancel the revision of the 2024 Pilkada Law (RUU) and there was no plenary meeting ahead of the end of Pilkada registration on August 27, 2024.
Also read: Wednesday (21/8) Morning, Rupiah Down As Market Anticipates RDG BI Results
Following the DPR’s statement, the Indonesian General Election Commission (KPU) emphasized that the registration of regional head candidate pairs will be guided by the Constitutional Court’s decision. The KPU also ensured that the Constitutional Court’s decision will be followed up in the Pilkada PKPU.
With this announcement, the public and investors are calm again and believe that democracy in Indonesia will run according to the existing track.
“So that it can increase the confidence of investors to return to the domestic financial market, because the political situation and conditions have returned to calm and stable,” Ibrahim concluded. (N-2)
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