Indonesian Rupiah Nears Rp16,000 per US Dollar; Import Prices May Rise

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Adi Ahdiat 10/10/2023 11:59 WIB

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Based on information from Bank Indonesia's exchange rate, on Monday, October 9, 2023, the Indonesian Rupiah exchange rate was at Rp15,675 per US dollar. This could lead to increased prices for importe

US Dollar Exchange Rate Movement against the Rupiah (October 9, 2018 - October 9, 2023)

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Indonesian Rupiah Nears Rp16,000 per US Dollar; Import Prices May Rise

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US Dollar Exchange Rate Movement against the Rupiah (October 9, 2018 - October 9, 2023)

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Based on information from Bank Indonesia's Jakarta Interbank Spot Dollar Rate (JISDOR) on Monday (October 9, 2023), the Indonesian Rupiah exchange rate stood at Rp15,675 per US dollar.

This exchange rate is the weakest since the beginning of 2023, as shown in the graph above.

The median Rupiah exchange rate for the first quarter of 2023 was Rp15,194 per US dollar.

In the second quarter of 2023, the median exchange rate was Rp14,888 per US dollar, and in the third quarter, it was Rp15,238 per US dollar.

According to David Sumual, Chief Economist at PT Bank Central Asia (BCA), the Rupiah exchange rate was quite controlled in the first and second quarters of 2023, strengthening compared to its position at the end of 2022.

However, a weakening trend in the Rupiah began to appear again from the third quarter and continues into the early fourth quarter of this year.

"The weakening has only consistently occurred since late July or early August until now, mainly due to the outflow of foreign funds from the bond and stock markets," said David in an interview with *Katadata*, Monday (October 9, 2023).

"Foreign capital outflow from the bond market reached Rp7.2 trillion by early August. From the stock market (foreign capital outflow) Rp1.6 trillion until early August, down Rp500 billion in September, and now it's negative," he added.

According to David, foreign investors are withdrawing funds from Indonesian financial markets due to global factors such as The Fed's interest rates, oil price fluctuations, and geopolitical factors.

Similarly, Aldian Taloputra, Economist at Standard Chartered Bank, stated that the current pressure on the Rupiah is due to external factors, namely rising interest rates in developed countries, especially the US, a weakening global economy, and global geopolitical conditions.

Aldian mentioned that the US interest rate hike affects the increase in US Treasury yields, resulting in a decrease in capital inflows to developing countries, including Indonesia.

Meanwhile, William Hartanto, Analyst at Panin Sekuritas, said that the most significant risk from the Rupiah's weakening is the increasing cost of imports.

"As a result, there is a possibility that domestic prices will also increase to adjust to the exchange rate," said William in an interview with *Katadata*, Monday (October 9, 2023).

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."