The rupiah exchange rate was at Rp14,392 per US dollar in spot market trading on Monday (7/2) morning. The Indonesian currency weakened 12 points or 0.08 percent from the previous trade, which was Rp. 14,380 per US dollar.
Money Market Analyst Ariston Tjendra predicts the rupiah will be under pressure against the US dollar today with a potential weakening towards Rp. 14,400-Rp. 14,420 and the support area is around Rp. 14,350.
He believes that the weakening of the rupiah is due to the threat of an increase in global crude oil prices which is approaching US$ 100 per barrel. Ariston explained that Indonesia could get a negative impact from the increase in inflation caused by the increase in energy prices.
“The increase in crude oil prices also has an impact on reducing the trade balance surplus because Indonesia is a net importer of crude oil. If the trade balance reaches a deficit again, the rupiah could weaken,” he explained.
On the other hand, Ariston assessed that pressure on the rupiah also came from the increase in the yield of US Government bonds. He said the 10-year tenor yield had touched the range of 1.9 percent, a level that had not been touched since January 2020.
In addition, he saw an increase in Covid-19 infections due to the spread of the Omicron variant, which also has the potential to trip up the rupiah today.
He added, “The situation of contagion that continues to increase in the country has also increased market concerns that could suppress the rupiah,” he added.
Other Asia’s Currency News
Meanwhile, currencies in Asia moved mixed this morning. The Japanese yen weakened 0.06 percent, the Hong Kong dollar weakened 0.03 percent, the Singapore dollar strengthened 0.01 percent, the Thai baht strengthened 0.32 percent and the South Korean won weakened 0.11 percent.
Then, the Malaysian ringgit weakened 0.11 percent, the Philippine peso weakened 0.27 percent, and the Chinese yuan strengthened 0.07 percent.
In contrast, the majority of currencies in developed countries strengthened this morning. Observed, the British pound was up 0.01 percent, the Canadian dollar was up 0.15 percent, the Australian dollar was up 0.06 percent, and the Swiss franc was stagnant.