Update COVID-19 in Indonesia: 70,736 confirmed infections, 3,417 deaths (9 July 2020)
6 July 2020 (closed)
USD/IDR (14,501) +55.01 +0.38%
EUR/IDR (16,343) -41.31 -0.25%
Jakarta Composite Index (5,052.79) -23.38 -0.46%
Although most Asian emerging currencies strengthened on Thursday (22/05) against the US dollar due to the preliminary HSBC Flash China Manufacturing Purchasing Managers' Index (PMI) recovering to 49.7 in May 2014 (from 48.1 one month earlier) and the Federal Reserve Minutes indicating that there will be no US interest rate hike soon, the Indonesian rupiah exchange rate continued to decline. Based on the Bloomberg Dollar Index, the currency had depreciated 0.19 percent to IDR 11,531 per US dollar by 5pm local Jakarta time.
The rupiah is under pressure as market participants are concerned about the current account deficit widening after the government proposed an additional IDR 74.3 trillion (USD $6.5 billion) worth of funds to cover for fuel subsidies in 2014, meaning that the Indonesian government will spend a total of IDR 285 trillion on fuel subsidies this year. Deputy Trade Minister Bayu Krisnamurthi said that he expects a wider trade deficit in 2014 than in 2013.
Ballooning fuel subsidy spending causes speculation that the Indonesian government needs to increase prices of subsidized fuels again (the last time it raised these prices was in June 2013). This may be a priority for the new government which will be inaugurated in October 2014.
Bank Indonesia's benchmark rupiah rate (the Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.07 percent to IDR 11,515 against the US dollar on Thursday (22/05).
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia