The exchange rate of the rupiah against the US dollar on the spot market weakened in today’s trading, Wednesday morning, February 2, 2022. The rupiah weakened by 0.26 percent to the position of Rp. 14,340 per US dollar. This figure decreased compared to the previous closing of Rp. 14,368 per US dollar.
Based on the latest Jakarta Interbank Spot Dollar Rate (JISDOR) reference rate or Monday afternoon, the rupiah was at Rp. 14,392 per US dollar.
Although the rupiah weakened in early trading, Money Market analyst Ariston Tjendra estimates that the rupiah exchange rate today has the potential to close higher. This is due to improving market sentiment towards risk assets this morning.
Ariston told VIVA on Wednesday, February 2, 2022, “The market looks optimistic about the potential for economic recovery amid the pandemic with better-than-expected corporate earnings reports, such as reports by US technology companies. Economic data in the US and Europe in January are also visible. getting better”
However, he warned that the market still had to anticipate a more aggressive US Federal Reserve (Fed) monetary tightening policy. This can be concluded from yesterday’s data where prices in the US manufacturing sector in January, still showed an increase that exceeded expectations.
He also added that employment conditions in the manufacturing sector are also getting better. Both of these support the Fed’s more aggressive monetary tightening policy. This is what causes the US dollar to not weaken too much and may reverse today against other currencies.
Meanwhile, regarding domestic news, Ariston explained that inflation data in January had an effect on the rupiah exchange rate. This opinion is supported by data from the consensus of analysts which states that year on year (YoY) inflation data can reach 2 percent.
This increase in inflation certainly affects the rupiah exchange rate. The increase in inflation could disrupt the economic recovery due to depressed people’s purchasing power.
However, Ariston continued, this could be the reason for Bank Indonesia to start tightening its monetary policy. With monetary policy tightening, Bank Indonesia will be able to maintain the yield differential between the rupiah and the US dollar. So that going forward this can help keep the rupiah exchange rate against the US dollar.
In addition, the potential strengthening of the rupiah is predicted to be at Rp. 14,300 with potential resistance at Rp. 14,380 per US dollar.
