Indonesian rupiah shows bearish trend amid US-China trade war

Indonesian rupiah shows bearish trend amid US-China trade war

Jakarta (ANTARA) - The Indonesian rupiah exchange rate, traded at the Jakarta inter-bank market earlier this week, depreciated over market fears surrounding the US-China trade impasse, as an agreement is yet to be reached between the two superpowers.  

The rupiah slid 11 points, or 0.08 percent, to Rp14,336 against the greenback than its earlier position of Rp14,225 per US dollar.

Lana Soelistianingsih, economist from Samuel Aset Manajemen, remarked here on Monday that the rupiah had weakened in line with China's economic slowdown resulting from the trade war with the United States (US).

"The US-China trade war has triggered concerns, thereby further slowing down the Chinese economy," Soelistianingsih remarked.

China's industrial production growth decelerated to five percent year-on-year (yoy) in May 2019, from 5.4 percent yoy in April, and far lower than the market expectations of 5.5 percent yoy. This index is the lowest recorded since 2002.

The slowdown was not solely restricted to the manufacturing sector but also the utilities sector.

"The slowdown in data has impelled almost all global markets to respond negatively," Soelistianingsih pointed out.

In the meantime, the middle exchange rate of Bank Indonesia, the central bank, on Monday showed that the rupiah decreased to Rp14,346 per US dollar than Rp14,304 per US dollar on the previous day.