Movement of the Rupiah Holds the Fed's Interest Rates
JurnalHub. The rupiah exchange rate movement traded between banks on Thursday, morning, weakened by 63 points to Rp 14,505 compared to the previous position of Rp 14,442 per US dollar. CSA Research Institute analyst Reza Priyambada in Jakarta on Thursday said the rupiah's currency movements were likely to be held back after the Federal Open Market Committee (FOMC) decided to raise interest rates.
"The increase in Fed interest rates affects currencies in developing countries, including the rupiah. However, it is projected to be temporary," he said.
The Fed raised its benchmark interest rate this year by 25 basis points to 2.5 percent. Thus, the Fed has raised its benchmark interest rate four times in 2018.
According to him, the opportunity for the rupiah to appreciate again is still quite open, given the lower growth forecast of the United States in 2019 so that the Fed will not be aggressive in raising interest rates. "The negative tone will be further reduced in the future," he said.
Economist Samuel Sekuritas, Ahmad Mikail, said economists expect the Fed to raise interest rates twice again next year, lower than previous expectations three times. "With expectations of lower interest rates, the US dollar is expected to slow down," he said.
Meanwhile, the US dollar exchange rate weakened against the other major currencies in late trading on New York time when the Federal Reserve raised interest rates by a quarter point. Following the Fed's decision to raise its benchmark interest rate, the greenback extended its advance but still remained at a weaker level against a basket of other major currencies.
In late New York trade, the euro rose to 1.1371 dollars from 1.1355 dollars in the previous session, and the British pound fell to 1.2622 dollars from 1.2638 dollars in the previous session. The Australian dollar fell to 0.7114 US dollars from 0.7171 US dollars.
The US dollar bought 112.35 Japanese yen, lower than 112.53 Japanese yen in the previous session. The US dollar rose to 0.9942 Swiss francs from 0.9928 Swiss francs, and increased to 1.3494 Canadian dollars from 1.3492 Canadian dollars.
"The increase in Fed interest rates affects currencies in developing countries, including the rupiah. However, it is projected to be temporary," he said.
The Fed raised its benchmark interest rate this year by 25 basis points to 2.5 percent. Thus, the Fed has raised its benchmark interest rate four times in 2018.
According to him, the opportunity for the rupiah to appreciate again is still quite open, given the lower growth forecast of the United States in 2019 so that the Fed will not be aggressive in raising interest rates. "The negative tone will be further reduced in the future," he said.
Economist Samuel Sekuritas, Ahmad Mikail, said economists expect the Fed to raise interest rates twice again next year, lower than previous expectations three times. "With expectations of lower interest rates, the US dollar is expected to slow down," he said.
Meanwhile, the US dollar exchange rate weakened against the other major currencies in late trading on New York time when the Federal Reserve raised interest rates by a quarter point. Following the Fed's decision to raise its benchmark interest rate, the greenback extended its advance but still remained at a weaker level against a basket of other major currencies.
In late New York trade, the euro rose to 1.1371 dollars from 1.1355 dollars in the previous session, and the British pound fell to 1.2622 dollars from 1.2638 dollars in the previous session. The Australian dollar fell to 0.7114 US dollars from 0.7171 US dollars.
The US dollar bought 112.35 Japanese yen, lower than 112.53 Japanese yen in the previous session. The US dollar rose to 0.9942 Swiss francs from 0.9928 Swiss francs, and increased to 1.3494 Canadian dollars from 1.3492 Canadian dollars.
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