Rupiah Strengthens, Reaching 15,480 on August 20, 2024

Based on data from Bank Indonesia's (BI) Jakarta Interbank Spot Dollar Rate (JISDOR), the United States dollar (US$) exchange rate against the Indonesian rupiah was recorded at Rp15,480 on Tuesday (20/8/2024).

This figure represents a 0.71% strengthening from the previous exchange rate of Rp15,591 on Monday (19/8/2024).

Signals of the rupiah's strengthening had been apparent for the past two weeks. On Thursday (8/8/2024), the dollar exchange rate against the rupiah was at 15,952. Previously, the rupiah was still in the 16,000 range.

Today's strengthening of the rupiah also echoes the exchange rate at the beginning of the year, specifically January 2, 2024, when it reached 15,473.

The rupiah's strengthening has been predicted by analysts. Quoting *Katadata.co.id*, Fikri C Permana, Senior Economist at KB Valbury Sekuritas, stated that today's strengthening of the rupiah could be due to positive sentiment from the government bond (SUN) auction. Fikri mentioned that the SUN auction with an indicative target of Rp20 trillion would be more active.

"This is in line with the higher capital inflow also expected in the primary SUN market," he said.

Meanwhile, Lukman Leong, a commodity and money market observer, also predicted that the rupiah would strengthen today. Lukman stated that the US dollar is continuing its weakening trend following very weak data on future economic activity.

"The US dollar is also under pressure from investor anticipation of Powell's speech this week, which is expected to deliver a dovish statement. The rupiah today could range from 15,500 per US dollar to 15,600," said Lukman.

In line with these two analysts, Ariston Tjendra, a money market observer, also sees further strengthening of the rupiah against the US dollar as possible today. This is due to the weakening US dollar and the increased expectation of a cut in the US Federal Reserve's benchmark interest rate.

"The probability of a cut is 100% at the Fed meeting in September, according to the CME FedWatch Tool," said Ariston.

Ariston added that the expectation of a rate cut is also increasing market interest in risky assets. This also supports the strengthening of the rupiah, which is also a risky asset.

Meanwhile, according to Ariston, domestic political developments, including the cabinet reshuffle, have not affected Indonesian financial market asset prices. This is because the cabinet reshuffle was only implemented for a few months.

*Disclaimer: This article was amended in the first paragraph on Wednesday, August 28, 2024, at 8:59 PM WIB. The exchange rate was originally written as Rp15,914 and has been corrected to Rp15,480.*

(Read also: [Rupiah Enters 15,000 Zone per US Dollar, Predicted to Continue Strengthening](https://databoks.katadata.co.id/datapublish/2024/08/09/rupiah-masuk-zona-15-ribu-per-dolar-as-diprediksi-terus-menguat))