Bank Woori Saudara analyst Rully Nova predicts the exchange rate will weaken as investors wait and see US inflation data.
"The rupiah is expected to weaken in today's trading, ranging from Rp16,450 to Rp16,550, influenced by global factors, including a significant rise in the dollar index , in connection with the wait-and-see attitude regarding US inflation data, which will be released tonight, and will influence the Fed's decision on interest rates (tomorrow)," he told ANTARA in Jakarta on Wednesday.
US inflation data for August is predicted to reach 2.9 percent, higher than the previous month's 2.7 percent.
Rully said market players remain optimistic about the prospect of three interest rate cuts by the end of this year if US inflation improves.
"The reduction could be as much as 50 basis points . If inflation worsens, the interest rate cut this month will still be only 25 bps due to the cooling labor market," he said.
He continued, reviewing domestic sentiment, the sell-off that has gripped the government bond market is still overshadowed by market participants' doubts about the new Minister of Finance's ability to manage fiscal risks. As of Tuesday (September 9), net foreign sales in the bond market reportedly reached Rp18.6 trillion.
Similarly, President Director of PT Doo Financial Futures Ariston Tjendra believes that the domestic situation is still overshadowed by the change in the Minister of Finance.
"The transition at the Ministry of Finance has created negative market sentiment. The market wants to see the new Finance Minister's capabilities," said Aris.
On the other hand, the US dollar is said to be under pressure due to expectations of a Fed interest rate cut this month.
