Rupiah Weakened Due to Investor Concerns Ahead of US Presidential Election, What's the Impact?

Bisnis | Ekonomi - Posted on 25 October 2024 Reading time 5 minutes

DIGIVESTASI - Currency analyst Lukman Leong stated that the weakening of the Indonesian rupiah is driven by investor concerns ahead of the 2024 U.S. Presidential Election.

"The rupiah is expected to weaken further against the strengthening U.S. dollar due to investor fears regarding the 2024 U.S. Presidential Election," Lukman told *Antara* in Jakarta on Thursday.

According to him, the concerns arise as the race between Donald Trump and Kamala Harris tightens in the polls. 

 

If Trump wins, he added, inflation in the U.S. is likely to rise due to the proposed tax and tariff policies. "This would make it even harder for the Federal Reserve (The Fed) to lower interest rates," he explained.

With the election set for November 5, the latest data from *ABC News* and *FiveThirtyEight* shows Harris currently leading with 48.2% support, while Trump follows closely with 46.4%, according to a survey released on Tuesday (Oct 22).

 

Additionally, the rupiah's projected depreciation today is also influenced by decreasing expectations of an interest rate cut by the Fed.

The latest survey forecasts a total rate cut of only 50 basis points (bps) for this year, with each reduction amounting to 25 bps per month. Previously, the rate cuts were expected to reach 70 bps.

"The exchange rate range for the rupiah against the U.S. dollar today is between IDR 15,600 and IDR 15,700 per U.S. dollar," Lukman added.

 

In Thursday morning’s interbank trading in Jakarta, the rupiah weakened by 14 points, or 0.09%, to IDR 15,640 per U.S. dollar from its previous position at IDR 15,627 per U.S. dollar.


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Source: antaranews.com

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