JAKARTA (TheInsiderStories)— Indonesian Rupiah slipped 1.24 per cent to Rp14,098 per US$1 on Thursday (21/06) in the half day, making the currency as the worst performing in Asia.
Other Asian currencies also declined against American (U.S) Dollar. The U.S Dollar gained 0.30 per cent against the Japanese Yen, 0.31 per cent against China Yuan, and 0.04 per cent against the South Korean Won.
In line with the Rupiah, Jakarta Composite Index (JCI) also slipped 12.13 points or 0.21 per cent at 5871.91 at the end of first session trading today. Total transaction volume reached 4.21 billion shares with a transaction value of Rp4.20 trillion. A total of 196 shares moved lower, while 147 rose and the remaining 120 were unchanged.
Eight sectors weakened and two sectors strengthened in the first trading session today. The miscellaneous industry sector recorded the biggest decline, at 1.07 percent. The manufacturing sector fell 0.58 percent and basic industrial sector decreased 0.51 percent. However, the mining sector is still up 1.09 percent and trade sector slightly up 0.03 percent.
The Coordinating Minister for Economic Affairs Darmin Nasution said the rupiah weakening after the Federal Reserves decided to increase the interest rate to the level of 1.75 per cent to 2 per cent in mid-June. “But that’s nothing to worry about,” he said at his office.
Nasution added that the long Eid Al-Fitr holiday also had an impact on the rupiah as investors return and reacted to the external development. He optimist the rupiah will be stable on the day after tomorrow.
Furthermore, the rupiah weakening also affected by Indonesia’s persistent current account deficit, which this year is exacerbated by a trade deficit. He noter: “It means the exports of goods and imports are a deficit, that must be solved first.”
Indonesia recorded current account deficit of $5.5 billion, or 2.15 per cent of GDP, in the first three months this year. In addition, the country posted a surprise $1.63 billion trade deficit in April 2018, the largest since $1.96 billion in April 2014.
In total, the country’s import in April 2018 was up 34.86 per cent to $16.09 billion from $11.95 billion in April 2017, while export dropped by 7.19 per cent to $14.47 billion from $13.27 billion in the same period last year.
The result in April swung Indonesia’s trade balance in the first four months of 2018 to a deficit of $1.31 billion from a surplus of $5.43 billion in the same period last year.