Rupiah to weaken over sentiment arising from debt-sharing policy

Rupiah to weaken over sentiment arising from debt-sharing policy

Illustration - An employee counts US dollars above the Indonesian rupiah (ANTARA FOTO/Akbar Nugroho Gumay)

In the short run, the burden-sharing policy will have a negative impact on the rupiah. However, in the long run, I am upbeat about it being positive for the Indonesian economy to recover faster.
Jakarta (ANTARA) - The rupiah is expected to weaken against the greenback in the Jakarta interbank market, Thursday, over sentiment arising from the planned extension of the burden-sharing agreement between the government and Bank Indonesia (BI) to 2022.

The Indonesian currency fell 55 points, or 0.37 percent, to trade at Rp14,800 per US dollar at 10:53 a.m. local time on Thursday as compared to Rp14,745 earlier.

"In the short run, the burden-sharing policy will have a negative impact on the rupiah. However, in the long run, I am upbeat about it being positive for the Indonesian economy to recover faster," Bank Mandiri money market analyst Rully Arya Wisnubroto stated here on Thursday.

Clouds thickened over Indonesia’s economic growth, as uncertainties persisted despite a gradual rebound in economic activities, he affirmed.

Wisnubroto called for applying various policies to boost the economy to recover soon from economic recession.

"In the short run, we need a unique policy, including a burden-sharing policy between the BI and finance ministry," he stated.

On the external front, the rupiah was affected by the US dollar's appreciation following the release of US manpower data that fell short of expectations but still showed a positive trend, he remarked.

"In addition, the US Manufacturing PMI also surpassed expectations," he stated.

On Wednesday (Sept 2), the rupiah tumbled 172 points, or 1.18 percent, to close at Rp14,745 against Rp14,573 per dollar.

According to the BI mid-rate, the rupiah weakened to Rp14,818 per dollar on Wednesday, from Rp14,804 earlier.

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