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Why Could Rupiah Be Battered To The Lowest Level Since The Monetary Crisis?

The rupiah exchange rate plunged to Rp16,611 per US dollar at the close of trading on Tuesday (3/25). This value was recorded as the lowest since 1998, which had reached Rp16,800 per US dollar. 

In fact, in the middle of yesterday's trading, at around 10:00 WIB, the rupiah was at Rp16,635 per US dollar. 

This condition occurred after the Composite Stock Price Index (IHSG) had previously plunged by almost 7 percent so that trading was temporarily suspended. 

Looking back, the rupiah's position this time also beat when the Covid-19 pandemic hit, at that time the Garuda currency only plunged to Rp16,550 per US dollar. In fact, there was nothing unexpected like a pandemic that hit the country. 

Doo Financial Futures Currency Analyst Lukman Leong said the sentiment that pushed the rupiah further down came from within and outside the country. 

From abroad, the rupiah was burdened by the recently released US economic data such as the Services PMI which turned out to be higher than expected. Then, there was also an increase in demand for US dollars ahead of the long holiday, causing a 'shock' in the financial market. 

"The speech of FOMC member Bostic who was hawkish also put pressure on the rupiah," Lukman told CNNIndonesia.com. 

Foreign sentiment, said Lukman, not only affected the rupiah, but also the currencies of other Asian countries. Although, Indonesia was indeed more pressured because of the unstable domestic situation due to the disappointing performance of the State Budget. 

Meanwhile, President Director of PT Doo Financial Futures Ariston Tjendra saw three causes that influenced the weakening of the rupiah. 

First, market concerns about the trade war triggered by US President Donald Trump's tariff policy against various countries. 

Most recently, Trump threatened to impose a 25 percent tariff on any country that buys oil from Venezuela. This is because Uncle Sam's country claims that Venezuela deliberately sent criminals to its country and made the US an enemy. 

"This trade war could trigger a decline in global trade, causing the global economy to decline," said Ariston. 

Tag: IHSG Monetary Crisis Rupiah