Rupiah Weakened Again on Tuesday (18/1/22). What Caused It?

Indonesia Rupiah

The Rupiah in the spot market closed down 0.19% to Rp 14,324 per US dollar on Monday (17/1). The weakening of the Rupiah is predicted to continue on Tuesday (18/1).

Not only the spot Rupiah, but the Rupiah at the Jisdor Bank Indonesia (BI) reference rate also weakened. On Monday (17/1), Garuda’s currency closed at Rp. 14,323 per dollar, aka a 0.09% decrease compared to the previous close.

Rupiah’s performance is influenced by several external and internal factors. These factors are inflation rate, money supply, interest rate, and current account policy.

If this variable increases, the Rupiah will strengthen. However, if this variable decreases, it will cause the performance of the Rupiah against the US Dollar to weaken.

The reasons

Then, what causes the weakening of the Rupiah this time? Monex Investindo Futures analyst Faisyal explained two things that triggered the weakening of the Rupiah.

The first cause, namely the strengthening of the US dollar in line with the market preparing for an increase in the US benchmark interest rate in March. While the second cause is the release of trade balance data released today which was below expectations.

Quoted from, Faisyal explained, “These two sentiments may still be negative sentiments for the rupiah on Tuesday (18/1) trading,”

He added that negative external sentiment also affected the weakening of the Indonesian currency, namely worries about the economic slowdown in China.

This is in line with the decision by the Chinese central bank (PBoC) to cut the medium-term lending rate by 10 basis points to 3.8%.

Seeing these events, Faisyal predicts that the Rupiah will still weaken on Tuesday (18/1/22). It is estimated that the Rupiah will move in the range of Rp. 14,265 – Rp. 14,350 per US dollar.