Thursday, 27 June 2019 | 15:15 WIB

Rupiah Closes 48 Points Higher as BI Maintains Benchmark Rate

Rupiah Closes 48 Points Higher as BI Maintains Benchmark Rate (klikbabel)

JAKARTA, NETRALNEWS.COM - Rupiah exchange rate on interbank level in Jakarta on Thursday (3/21/2019) afternoon is closed on the rise after the announcement of the Bank Indonesia (BI) benchmark interest policy.

The rupiah exchange rate Thursday afternoon rose 48 points to IDR 14,140 per US dollar from the previous rate of IDR 14,188 per US dollar.

President Director of PT Garuda Berjangka Ibrahim Assuaibi in Jakarta on Thursday (3/21/2019), said that BI's policy of keeping BI 7Day Reverse Repo Rate at the 6 percent level became a positive internal sentiment for the rupiah today.

"Even if conditions remain stable, such as a 'relaxed' inflation rate or a more manageable current account deficit, it is not impossible that BI will reduce its benchmark interest rate. If this step is taken, it will be fuel to accelerate economic growth," Ibrahim said.

According to Ibrahim, with the rupiah tending to strengthen and the "relaxed" domestic inflation rate or only 2.57 percent (year to year / yoy) until February and the lowest since November 2009, it may be time for BI to consider entering into a driver of economic growth with how to relax interest rate policies.

"However, if the current account deficit can be more controlled," he said.

From the external side, positive sentiment pushed the rupiah to strengthen, namely the Fed, which suddenly ended the cycle of interest rate hikes that had been going on for three years. This attitude ignores the two-fold projection made in December 2018, amid signs of a weakening US economy that is increasingly prominent.

While the negative sentiment for the movement of the rupiah today, Ibrahim continued, namely the fear of a chaotic Brexit has returned to the European market after a speech from Prime Minister Theresa May on Wednesday night (20/3/2019), which explained that there was no choice but to the Withdrawal Agreement has been rejected twice by parliament, or Brexit "without agreement in eight days".

In addition, the development of world crude oil prices became a negative sentiment for the rupiah. At 3:30 p.m., the price of light sweet crude rose to as high as 60.11 dollars per barrel. When oil prices rise, the cost of importing these commodities will be more expensive.

"Foreign exchange which is 'burning' for import purposes is more so that it adds to the pressure in the current account. The rupiah also has a chance to weaken because the foundation is back fragile," Ibrahim said.

The exchange rate (exchange rate) of the rupiah opened at Rp14,105 in the morning. Throughout the day, the rupiah moved in the range of IDR 14,093 per US dollar to IDR14,140 per US dollar.

Meanwhile, the central exchange rate of Bank Indonesia on Thursday showed that the rupiah strengthened to IDR 14,102 per US dollar compared to the previous day at IDR 14,231 per US dollar.