Rupiah forecast to weaken over escalation of trade war

Rupiah forecast to weaken over escalation of trade war

The rupiah is still inclined to weaken. Typically, this trade war is, without a doubt, detrimental to emerging market countries,
Jakarta (ANTARA) - The rupiah exchange rate traded among banks in Jakarta on Thursday is forecast to fall further, as the trade war between the United States (US) and China ricochets.

As of 10:15 a.m. WIB, the rupiah dropped 58 points to Rp14,353 per US dollar, in comparison with Rp14,295 per US dollar on the previous day.

"The rupiah is still inclined to weaken. Typically, this trade war is, without a doubt, detrimental to emerging market countries," Dini Nurhadi Yasyi, an analyst at Monex Investindo Futures, noted in Jakarta on Thursday.

The statement of the US Trade Representative Office on Wednesday (May 8) night indicated a hike in the tariff imposed on US$200 billion of Chinese goods, from 10 percent to 25 percent and will come into effect from May 10, 2019.

Yasyi remarked that US President Donald Trump was least concerned if the trade war persisted and maintained that China does not take steps that could be perceived as detrimental to the United States.

Moreover, the rupiah also weakened over fears of a widening current account deficit (CAD), whose data will be made public by Bank Indonesia today.

"Our CAD is also a matter of concern, as the global oil prices have risen sharply and can threaten the CAD," Yasyi noted.

Bank Indonesia's middle exchange rate on Thursday indicated that the rupiah exchange rate had fallen to Rp14,338 per US dollar than Rp14,305 per US dollar on the previous day.  

   

Comments