According to the Jakarta Interbank Spot Dollar Rate (JISDOR), the rupiah exchange rate stood at Rp 14,617 per US dollar on Monday, 0.54 percent lower than its position on Friday.

Futures firm PT Garuda Berjangka president director Ibrahim explained that the rupiah depreciation was triggered by both internal and external factors. “The trade deficit figure negatively affects the rupiah exchange rate,” Ibrahim said as quoted by kontan.co.id.

Indonesia recorded a trade deficit of US$2.05 billion in November, the BPS announced on Monday, higher than the $2.03 billion trade deficit in July, which was then its highest deficit in five years.

Ibrahim said the sluggish global economy, a trade war between China and the US and Brexit also negatively affected the rupiah. The Federal Reserve is expected to increase the Fed Fund Rate during a Federal Open Market Committee (FOMC) meeting on Dec. 19 and 20.

Meanwhile, Bank Central Asia (BCA) economist David Sumual said the weakening of the rupiah was triggered by the expected outcome of the FOMC meeting.

“There were increases in data that had been published in the United States, like in retail sales, industry production and the manufacturing index. It is in line with the estimation that the Fed will increase the rate,” he said, adding that, domestically, the announcement of the trade data significantly contributed to negative sentiment surrounding the rupiah. (bbn).

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