The Indonesian currency showed strengthening against several European currencies such as the euro, pound sterling, and the Swiss franc dollar in today’s trading (24/3/2022).
According to Refinitiv data, at 11:00 WIB the euro against the rupiah weakened 0.11% to Rp 15,767.53/EUR and the Swiss franc dollar was down 0.10% against the rupiah to Rp 15,399.06/CHF.
The same thing happened, the pound sterling weakened against the Indonesian currency as much as 0.05% to Rp 18,929.94/GBP.
Today, UK Treasury Secretary Rishi Sunak has set out measures to combat soaring energy, food, and fuel prices by cutting fuel prices by 5 points, but will still raise National Insurance in April by 1.25 points.
However, Sunak promised to cut income taxes in 2024 when the economy is in better shape.
Soaring energy and food prices contributed to rising inflation and caused the UK’s cost of living to rise. But wage costs also rose by 6.6%.
The weakening of several European currencies was due to the unfavorable sentiment that was haunting Europe and the UK.
Overall, high inflation rates coupled with rising wages will lead to an inflationary spiral and create problems for the economy. It seems unlikely that an employer would charge that much when faced with cost pressures in their company’s energy bills.
In fact, the inflation rate in the UK in February had reached 6.2% and became the highest level in the last 30 years.
In Europe, the bad news was heard again, after Russian President Vladimir Putin threatened countries not friendly with Russia, including Europe, to pay the price of Russian gas in rubles.
It is known, the European region is very dependent on Russian energy. Russian gas accounts for 40% of total European consumption.
“Russia will continue to supply natural gas according to a fixed volume and price in the previously agreed contract. However, the payment currency will be changed to the Russian ruble,” Putin was quoted as saying by CNBC International.
That way, a possible currency change could send European and UK wholesale gas prices up by around 15-20%.
Negative sentiment is still the background for the strengthening of Garuda currency in the Blue Continent today, the rupiah has even managed to strengthen since yesterday against the Swiss franc dollar and the euro.