Rp100.000 the biggest Indonesian currency. (Image via OkeZone)

Rupiah Reached Rp14.000 Today

It’s a bad news for Indonesia’s currency. This morning, it was reported that rupiah has weakening and at Rp14.100/US$. It is due to the fact that Dollar Index is strengthen about 0,37%. After U.S. Central Bank’s The Federal Reserves (The Fed) decided to announce about the new interest rate, the U.S. dollar got strengthen. Head of The Fed Jerome Powell, revealed they have decided to decrease the 25 bps interest rate to 2-2,25%. Previously, U.S. currency was predicted to fall if they announce the new interest rate. What makes them become stronger?

Powell also stated that the decrease of interest rate is not going to keep decrease. In fact, they will not plan to decrease it more in a long time. However, he repeated that he’s not saying the interest rate is not going to decrease in the future. In a contrary to Powell’s announcement, U.S. President Donald Trump stated that The Fed is disappointing. Trump wrote on his Twitter that the decision is upsetting. Nonetheless, The Fed doesn’t apply a strict monetary policy anymore.

Bank Indonesia Governor Deputy Dody Budi Waluyo revealed that there is still a possibility of Rupiah to come back stronger. He thinks that the weakened of Rupiah is considerable due to the announcement The Fed currently made. However, people are no need to be worried as some macro national economy indicators show that Indonesia’s economy is going smooth.

Source: https://www.cnbcindonesia.com/market/20190801083038-17-89016/the-fed-bikin-rupiah-sentuh-rp-14100-us--terlemah-di-asia/2