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Indonesia: Rupiah drops further on Tuesday, heads toward Rp 15,000 per US dollar

The rupiah is moving toward Rp 15,000 per United States dollar as it was quoted at Rp 14,444 per US dollar or 0.57 percent lower than the previous day, according to the Jakarta Interbank Spot Dollar Rate (JISDOR).

It was fifth day the currency had weakened against the greenback – Rp 14,362 on Monday, Rp 13,347 last Friday, Rp 14,338 last Thursday and Rp 14,305 last Wednesday.

Futures firm Monex Investindo Futures analyst Dini Nurhadi Yasyi said the rupiah could not defend itself from the external pressure, particularly due to the trade war between the United States and China, following the enforcement of higher import tariffs by the Donald Trump administration on products from China.

“Market players are worried that the US will also enforce higher import tariffs for products from other countries,” Dini said as quoted by kontan.co.id, adding that she, however did not expect the rupiah to further depreciate.

Dini estimated the rupiah exchange rate would stand between Rp 14,420 and Rp 14,480 per US dollar on Tuesday.

Other regional currencies that also weakened against dollar on Tuesday were the rupee, yen, ringgit and Taiwan dollar, while the baht, yuan, Singapore dollar, won, peso and Hong Kong dollar strengthened.

Meanwhile, Bank Mandiri stock exchange analyst Reny Eka Putri said market players were still in wait and see mode on the end of the trade war. They believed China would retaliate the US’ new import tariffs.

Futures firm PT Garuda Berjangka president director Ibrahim said the rupiah depreciation would continue until external pressure on the financial market was alleviated.

He said the rupiah had weakened because of domestic factors, particularly because of the current account deficit, which was recorded at US$7 billion in the first quarter of 2019 or 2.6 percent of gross domestic product (GDP).

The figure was an improvement from the fourth quarter of 2018, which saw the deficit stand at 3.6 percent of GDP, however was worse compared to its position in the first quarter of 2018, which was recorded at $5.19 billion or 2.01 percent of GDP. (bbn)

Source: https://www.thejakartapost.com/news/2019/05/14/rupiah-drops-further-on-tuesday-heads-toward-rp-15000-per-us-dollar.html