Jakarta, CNBC Indonesia – The rupiah exchange rate shot up again at the opening of trading Monday (16/1/2023) after strengthening sharply throughout last week. According to Refinitiv data, the rupiah immediately shot up 0.43% to IDR 15,075/US$ as soon as trading opened. The strengthening of the rupiah then increased by almost 1% to IDR 15,000/US$.
Market participants today await the release of Indonesia’s trade balance data. The trade balance surplus is expected to shrink greatly in December 2022. This weakening is in line with the global economic slowdown.
The market consensus compiled by CNBC Indonesia from 11 institutions estimates a trade balance surplus in December 2022 of US$ 3.92 billion. This surplus is much lower compared to November 2022 which reached US$ 5.16 billion.
If this forecast comes true, the surplus in December 2022 will be the lowest since May 2022. For the record, Indonesia banned CPO exports that month.
The consensus also indicated that exports would grow 6.6% (year on year/yoy) while imports fell 3.1%.
If the trade balance returns to print a surplus, then Indonesia will have recorded a surplus for 32 consecutive months.
Throughout last week the rupiah shot up more than 3%. The weekly gain was also the biggest since early June 2020.
The sharp strengthening of the rupiah was supported from within and outside the country. The rupiah gained momentum after the government announced that it would revise Government Regulation (PP) Number 1 of 2019 concerning Export Proceeds (DHE). With this revision DHE will be held longer in the country, so that the supply of US dollars can increase.
The issue of the draining supply of US dollars at home can be seen from the trade balance which has recorded a surplus for 31 consecutive months, but foreign exchange reserves have continued to decline.
Then, inflation in the United States, which continued to decline, accelerated the appreciation of the rupiah last week. The decline in inflation means that the US central bank (The Fed) may reduce its aggressiveness in raising interest rates even more, there is even a chance that it will be lowered before 2024.
This made the US dollar index fall 1.6% to 102.2 which is the lowest level since June last year.
CNBC INDONESIA RESEARCH TEAM
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Sprawled against the US Dollar, Rupiah Approaches the Level of IDR 15,600/USD
(pap/pap)
