BI's benchmark interest rate cut, Rupiah strengthens slightly at the end of the week

The Indonesian Rupiah strengthened by 0.15% against the US dollar in the spot market this week, reaching Rp 14,212.5 on Friday (August 23rd). This strengthening was driven by Bank Indonesia's (BI) decision to cut its benchmark interest rate by 25 basis points from 5.75% to 5.5%.

From an external perspective, Ibrahim, the CEO of PT Garuda Berjangka, stated that Rupiah movements were influenced by market actions focused on awaiting comments from The Fed members at the central bank's annual meeting. The Rupiah has strengthened for three consecutive days.

According to Josua Pardede, an economist at Bank Permata, the strengthening of the Rupiah on Wednesday (August 21st) was supported by the release of the Federal Open Market Committee (FOMC) meeting minutes. Furthermore, the ongoing US-China trade war continues to influence Rupiah movements. This is because Trump recently claimed to be the chosen one to handle the trade war with China.

(Read Databoks: The Impact of Currency Wars: The Indonesian Rupiah Continues to Weaken)