Rupiah projected to weaken after IMF lowers economic growth forecast

Rupiah projected to weaken after IMF lowers economic growth forecast

(Illustration) - A teller counts some US dollar bills in a bank in Jakarta. (ANTARA FOTO/Muhammad Adimaja/AF)

Jakarta (ANTARA) - Indonesia's rupiah exchange rate traded at the Jakarta interbank market, Thursday, is forecast to weaken, as the International Monetary Fund (IMF) lowered the economic projection for ASEAN countries: Singapore, Malaysia, Indonesia, Thailand, and the Philippines.

At 10:27 a.m. local time, the rupiah strengthened by 12 points or 0.09 percent, to Rp13,985 per US dollar, from Rp13,997 per US dollar earlier.

Samuel Aset Management’s economist Lana Soelistianingsih expounded in Jakarta on Thursday that the IMF’s cut was attributed to the foreseen sluggish economic and global trade.

“The US-China trade war and Brexit, without any agreement, will be causal to a decline in the international trade volume. Likewise, the economic growth will also slow down,” she noted.

In July 2019, the IMF report had cut the economic growth projects for 2019 by five percent, from 5.1 percent and for 2020, from 5.2 percent to 5.1 percent, taking into account the sluggish global economic growth.

The IMF has forecast the global economy to record a growth of 3.2 percent in 2019 and would likely improve to 3.5 percent in 2020, despite both projections being downward revisions from the earlier one.

Soelistianingsih has also forecast that on Thursday  the rupiah would weaken in the range of Rp14,000 to Rp14,030 per US dollar.

In the meantime, Indonesian central bank, Bank Indonesia's (BI’s) middle rate showed that the rupiah had strengthened to Rp13,986 per US dollar, or rose 25 points, from Rp14,011 per US dollar on the previous day.

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