Rupiah Plunges Again, Above Rp 14,500 per US Dollar

Based on Bloomberg data, the Indonesian Rupiah (IDR) exchange rate in the spot market on Thursday (December 6th) weakened by 1.1% to Rp 14,563 per US dollar. This resulted in a 2.24% depreciation of the Rupiah over the past three days. However, by 13:25 WIB (Western Indonesian Time), the Rupiah had slightly recovered to Rp 14,553 per US dollar.

Investor uncertainty regarding US-China trade war negotiations led fund managers to reduce investments in emerging markets, considered risky, and shift their investments to US dollars. Consequently, the US dollar strengthened against major currencies, including regional currencies like the Rupiah. Furthermore, the Rupiah's significant strengthening in the past month prompted profit-taking by market players, pushing the Rupiah back above Rp 14,500 per US dollar.

Previously, the Rupiah had strengthened considerably by Rp 980 per US dollar (6.44%) to Rp 14,244 per US dollar by December 3rd, compared to its position on October 30th at Rp 15,244 per US dollar. Easing concerns about the US-China trade war and still promising returns in the Indonesian financial market attracted investors back to the domestic stock and bond markets. As a result, the Rupiah had strengthened to below Rp 14,300 per US dollar.

(Read Databoks: What Made the Rupiah Strong)