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Market volatility looms ahead of US election: economists
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A cashier counts rupiah at an office in Jakarta. (The Jakarta Post/Nurhayati)
T
he US presidential election in November could negatively impact currency market sentiment in Indonesia, leading to depreciation of the rupiah, economists have predicted.
Singapore-based DBS Group Research economist Gundy Cahyadi said uncertainties in the market would drive market volatility.
“We may see market volatility ahead of the US election. The rupiah trend going forward will be driven by the broad dollar theme as well, especially considering the expectation of a US Fed rate hike by the year’s end,” he told The Jakarta Post on Friday.
Gundy predicted that before the end of the year, the US dollar would likely appreciate against most currencies, including the rupiah.
Samuel Asset Management chief economist Lana Soelistianingsih said two scenarios could happen depending on which candidate won the election.
Lana thinks that if Republican presidential candidate Donald Trump wins, investors may take a wait-and-see approach before making any decisions. She predicts that if Trump wins, the rupiah will slide to between Rp 13,000 and Rp 13,100 per dollar by the end of 2016.
Meanwhile, if Democratic presidential candidate Hillary Clinton wins, then the situation will be far more helpful for the rupiah because the market will be less volatile. She forecasts the rupiah to balance between Rp 12,900 and Rp 13,000 per dollar by the end of the year in that scenario.
Meanwhile, Bank Indonesia asserted on Friday that the rupiah exchange rate would not suffer any impacts from the election. (win/bbn)
