Rupiah correction occurs early this week as Asian currencies tumble

Rupiah correction occurs early this week as Asian currencies tumble

Jakarta (ANTARA) - A correction again occurred in the exchange rate of the rupiah traded at the Jakarta interbank market earlier this week on the back of weaker Asian currencies.

On Monday morning, the Indonesian rupiah stood at Rp14,348 per US dollar, weakening 21 points, or 0.15 percent, from Rp14,327 per US dollar recorded during the previous day. 

Samuel Aset Management economist Lana Soelistianingsih remarked here on Monday that the rupiah slid after the central bank, Bank Indonesia, released the current account balance data last weekend.

"Indonesia's current account deficit constituted 2.6 percent of the gross domestic product (GDP), showing an improvement as compared to a deficit of 3.59 percent of the GDP in Q4-2018 but relatively high than the deficit of 2.01 percent of the GDP in Q1-2018," Soelistianingsih remarked.

Externally, the US annual inflation in April 2019 rose to two percent year-on-year (yoy), up from 1.9 percent yoy in March 2019, but yet lesser than the projected figure of 2.1 percent yoy.

The inflation rate in April was the highest since November 2018 and attributed to the increasing crude oil prices.

In the meantime, US inflation on a month-by-month basis (mom) was recorded at 0.3 percent in April, slowing down from 0.4 percent mom in March.

"The US inflation is still very safe and has not become a cause of concern over the Fed hiking its interest rates that has the potential to drop due to 'pressure' from President Trump's request, among others," Soelistianingsih explained.

Soelistianingsih has forecast on Monday (May 13) that the rupiah can yet potentially strengthen in the range of Rp14,300 per US dollar to Rp14,320 per US dollar.

Asian currencies that weakened comprised the Yuan, dropping 0.44 percent against the US dollar; Won, decreasing 0.8 percent; the Singapore dollar, 0.19 percent; and Baht, 0.12 percent. On the contrary, the Yen strengthened 0.18 percent against the US dollar.