In the long run, the rupiah can be corrected

March 20, 2019, 09.13 AM  | Reporter: Yusuf Imam Santoso
In the long run, the rupiah can be corrected


RUPIAH - JAKARTA. Import costs can be a stumbling block for the rupiah. One of them comes from the increase in world oil prices.

The West Texas Intermediate (WTI) oil price for the April 2019 delivery contract at the NY York Mercantile Exchange (NYMEX) rose 0.35 percent at USD 59.30 per barrel.

Quoting Bloomberg on Tuesday (3/19) the rupiah closed up slightly by 0.05% at Rp. 14,232 per US dollar. According to the central exchange rate of Bank Indonesia (BI), the rupiah strengthened 0.09% to Rp. 14,228 per US dollar. Monex Investindo Futures analyst Faisyal said, rising oil prices caused a limited rupiah appreciation.

Crude oil prices rose amid restrictions on production by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC. Oil production is reduced by 1.2 million barrels per day.

In the long run, the fluctuation of oil prices can affect the rupiah exchange rate against the US dollar. The issue of Brexit and the US-China truce can also haunt the movement of the rupiah.

UOB Indonesia Head of Economic & Research Enrico Tanuwidjaja said Indonesia would face import payments, foreign debt, and dividends. "It all requires a large amount of US dollar liquidity so that it can threaten the rupiah," Enrico said, Tuesday (3/19).

However, Enrico predicts that at least in the next six weeks the rupiah will be in a strengthening trend. Today he predicts rupiah moves between Rp. 14,100-Rp. 14,285 per US dollar. Whereas until the end of the first quarter, the rupiah will go back and forth between Rp. 14,150-Rp. 14,250 per US dollar.

Editor: Hasbi Maulana

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