Monday, 18 October 2021 | 06:30 WIB

Rupiah Weakens as Markets Still Wary of Direction of US Bonds Yields

Rupiah Weakens as Markets Still Wary of Direction of US Bonds Yields (pixabay)

JAKARTA, NETRALNEWS.COM - Rupiah exchange rate at the interbank level in Jakarta on Wednesday (03/24/2021) afternoon is closed lower, as market players were still wary of the direction of yield on US bonds.

The rupiah was closed on a decline of 28 points or 0.2 percent to IDR14,425 per US dollar, as compared to the position of IDR14,397 per dollar  at the previous trade closing.

Asia Valbury Futures analyst Lukman Leong said in Jakarta, on Wednesday (03/24/2021) said that rupiah's movement today was influenced by the statement of the Governor of the Federal Reserve (Fed) Jerome Powell and the US Minister of Finance Janet Yellen before the US House Committee on Financial Services last night.

"There are mixed signal from them. The recovery concern is in contrast to Powell's previous statement on allowing inflation to rise. This time it actually made bond yields decrease, but failed to weaken the US dollar due to risk aversion factors," Lukman said. It is feared that the direction of future bond yields will make future government policies hawkish.

The meeting between Yellen and Powell did not seem to provide a clear picture of the problem. The 10-year US bond yield was stable yesterday at the level of 1.62 percent.

Powell himself said that the improvement in the US economy was on the right track, but the economic sectors affected by COVID-19 had not fully recovered while the unemployment rate in the US was still quite high. However, Lukman considered that the strengthening of the US dollar this time was not so solid, so that the weakening of the rupiah could be slowed down until the end of the week.

"However, the rupiah will still be under pressure. It is likely that it will weaken somewhat," he said.

The rupiah was opened lower in the morning to IDR14,423 per US dollar. During the day, the rupiah moved in the range of IDR14,420 to IDR14,460 per dollar.

Meanwhile, Bank Indonesia's Jakarta Interbank Spot Dollar Rate (JISDOR) on Wednesday showed that the rupiah had climbed down to IDR14,455 per dollar, as compared to the previous day's position of IDR14,421 per dollar.