Jakarta, Indonesia Sentinel — The Indonesian Rupiah (IDR) experienced a slight uptick as markets eagerly anticipated Indonesia’s trade balance report, which is expected to show another surplus. Data from Refinitiv indicates that by the close of trading on Monday (October 14, 2024), the Rupiah strengthened by 0.13% against the U.S. dollar, settling at Rp15,555/USD.
This modest increase was driven by market participants adopting a cautious wait-and-see stance ahead of the September 2024 trade balance report. Analysts predict the trade balance will continue to show a surplus, likely larger than in the previous month, due in part to rising commodity prices.
A consensus compiled by CNBC Indonesia, from 11 financial institutions forecasts that Indonesia’s trade surplus for September 2024 will reach $2.9 billion.
If the data confirms this figure, it would mark a slight improvement over the $2.89 billion surplus recorded in August 2024. Additionally, this would be the 53rd consecutive month of trade surpluses for Indonesia, a streak that began in May 2020.
According to the consensus, exports are expected to grow by 8.78% year-on-year (YoY), while imports are forecast to increase by 13.87% YoY during September 2024.
Beyond Indonesia’s internal economic dynamics, the Rupiah’s performance was also influenced by global factors, particularly investor sentiment regarding China’s economy.
Last weekend, Chinese Finance Minister Lan Foan reaffirmed the government’s commitment to supporting the economy through fiscal measures, promising to increase public debt.
However, the details of these measures remain vague, leading to some disappointment among investors. Tony Sycamore, an analyst at IG Markets, noted that the expected fiscal policies to mitigate growth risks and boost consumer confidence in China were not clearly outlined.
Despite this initial uncertainty, Goldman Sachs analysts believe the measures announced by China’s government over the weekend and earlier in the week could contribute 0.4 percentage points to the country’s GDP growth in 2025.
As a result, Goldman Sachs revised its forecast for China’s real GDP growth in 2025, raising it from 4.3% to 4.7%. In the near term, investors will be closely watching China’s Q3 2024 growth data, set to be released later this week. For context, China’s economy grew by 4.7% YoY in Q2 2024, the weakest annual growth rate since Q1 2023, weighed down by a prolonged property sector downturn, weak domestic demand, a depreciating yuan, and ongoing trade tensions with Western nations.
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Technical Analysis of Rupiah Surplus
From a technical perspective, the Rupiah has shown signs of strengthening against the U.S. dollar in hourly trading. The nearest potential target for further gains lies in closing the gap that occurred on October 4, 2024, with support around Rp15,525/USD. However, traders should be cautious of resistance near Rp15,700/USD, which marks both a psychological level and the intraday high from October 7, 2024.
(Becky)
