Rupiah is Weakening, Why?
16 October 2023
The Rupiah continues to lose ground to the US dollar. The Rupiah's value versus the US dollar as of October 12 2023 was IDR 15,749. This is the highest level this year. Why then is the Rupiah depreciating?
Chart: CNBC Indonesia Research
The US Central Bank's benchmark interest rate, The Federal Reserve (The Fed), remains at a high position.
The US Central Bank raised its benchmark interest rate in an effort to combat the nation's rising inflation. The demand for US dollars will rise as a result of this hike in the benchmark interest rate, weakening the rupiah. The people is still on high alert over the FED's policy's potential future course, hence the rupiah is still in decline.
Image Source: Unsplash.com
China's Economic Slowdown
After the US, China is the nation with the second-largest economy. In light of this, if the national economy weakens, so may global expansion. As a result of its close ties to China, Indonesia's economy is susceptible to the effects of that nation's economic slump. One of the factors contributing to the rupiah's depreciation is sentiment on China's ongoing economic decline and its effects on Indonesia.
Source: CNBC Indonesia
