The Indonesian rupiah is expected to strengthen in the coming week, buoyed by positive sentiment from stimulus measures announced by China on October 12.
At the close of trading on Friday, October 11, the Jakarta Interbank Spot Dollar Rate (Jisdor) recorded the rupiah at Rp 15,609 per US dollar, a 0.31% increase from the previous day. In the spot market, the rupiah ended at Rp 15,578 per US dollar, rising 0.64% compared to the prior day's closing.
Commodity and currency analyst Lukman Leong noted that China's stimulus could enhance the rupiah's value. He stated, “The effect of the stimulus leans towards a risk-on sentiment, supporting China's economic recovery, which will likely increase Indonesian export demand for commodities.”
Leong also indicated that this stimulus would not directly lead to capital outflows from Indonesia. Despite the recent strength of the US dollar, he believes that riskier currencies, including the rupiah, may appreciate against the dollar in the long term.
Ibrahim Assuaibi, Director of PT Laba Forexindo Berjangka, is optimistic about the rupiah's performance on Monday, October 14. He commented that stable US economic data, coupled with unchanged producer price index figures for September, suggests a potential interest rate cut by the Federal Reserve.
Domestically, predictions for Indonesia's economic growth, projected by the World Bank and IMF to exceed 5% for 2024-2025, also support the rupiah's strengthening. “This situation will attract investors back to the domestic market, ultimately reinforcing the currency,” Assuaibi added.
For Monday, Leong anticipates the rupiah to trade between Rp 15,475 and Rp 15,600 per US dollar, while Assuaibi expects it could strengthen to Rp 15,500 per US dollar.