THE rupiah exchange rate against the US dollar on Monday (29/7) closed stronger as the market predicted domestic inflation in July 2024 would decline. At the end of Monday’s trading, the rupiah strengthened 20 points or 0.12% to 16,281 per US dollar from the previous 16,301 per US dollar.
“Domestic related to July inflation data to be announced by the Central Statistics Agency (BPS) this Thursday,” said Bank Woori analyst Saudara Rully Nova in Jakarta, Monday. Indonesia’s inflation in July is expected to still decline in the range of 2.35% to 2.50%.
In addition, the strengthening of the rupiah was also influenced by the yield on United States (US) bonds which fell because US inflation data was in line with market expectations and optimism about the US central bank’s or The Fed’s interest rate cut in September 2024. The yield on 10-year US bonds was 4.19%.
The Personal Expenditure Price Index (PCE) slowed to 2.5% year-on-year (yoy) from 2.6% yoy. The Core PCE Price Index was unchanged at 2.6% yoy, slightly above expectations of 2.5% yoy.
However, the strengthening of the rupiah was limited by market anticipation of the results of the Fed meeting on August 1, 2024.
Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (Jisdor) rose to Rp16,286 per US dollar on Monday from Rp16,294 per US dollar previously. (Ant/Z-2)
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