Jakarta, CNBC Indonesia – The rupiah exchange rate has been strong against the US dollar (US) lately, successfully posted a 6-week straight strengthening, and continued in the first 2 days of this week.
Before weakening 0.14% to Rp.14,050 / US $ in trading Wednesday (11/18/2020), in the previous 2 days the rupiah posted a strengthening of 0.85%. Meanwhile, the total strengthening for 6 consecutive weeks was 4.7%.
The sentiment of market players is now starting to be positive, even “buying up” the rupiah. This can be seen from the results of the biweekly survey Reuters indicates the investor is taking a position bullish (strengthening trend) the highest rupiah in the last 6 years.
The survey from Reuters uses a range of -3 to 3. A positive number means that market participants took a position long (buy) against the US dollar and short (sell) against rupiah. Vice versa, negative numbers mean taking a position short (sell) against the US dollar and long (buy) against rupiah.
The latest survey results released on Thursday (12/11/2020) showed the number -1.01, racing from 2 weeks ago which was still positive 0.09. This negative number is the highest in the last 6 years.
The higher the negative number means that the more market players take long rupiah positions, which means that the Garuda Currency is again loved.
The survey is consistent with the movement of the rupiah this year, when the rate is negative, the rupiah tends to strengthen, and vice versa.
From the beginning of this year to the end of February, the survey results continued to show negative numbers. The biggest negative figure for that period was recorded in the January 23 survey, namely -0.86.
At that time the rupiah was victorious, and on January 24, it posted a 2.29% gain year-to-date (YtD) to IDR 13,565 / US $, and became the best currency in the world at that time.
Conversely, in March when the rupiah was experiencing turmoil, investors took a short position on the rupiah, with a survey figure released by Reuters of 1.57. The higher the positive value, the bigger the position short rupiah taken by investors. The rupiah also collapsed almost 20% Ytd to Rp. 16,620 / US $, the weakest since the 1998 monetary crisis.
Entering April, the rupiah slowly strengthened and the results of a Reuters survey showed a position short the rupiah continued to decrease, until finally investors took a long position starting on May 28. As a result, the rupiah posted a gain of more than 15% from early April to early June.
But since then, the survey results have been dominated by positions short back, until finally investors took a long position again last week, even reaching a 6-year high.
Seeing the consistency of the movement of the rupiah with the survey results this year, the rupiah certainly has the opportunity to strengthen in the rest of this year, even if it does not rule out the possibility of returning to the range of Rp. 13,500 / US $.
Moreover, the US dollar is predicted to decline until next year. While the current transaction (current account) Indonesia is predicted to record a surplus for the first time in 9 years in the third quarter of 2020, which will support the continued strengthening of the rupiah
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