Investors are still monitoring US economic data, especially after news that the Federal Reserve will continue to hike interest rates. On a slow track, Bank Indonesia is considered to have an opportunity to make the Rupiah stronger.

In releasing the minutes of the Fed's monetary policy meeting a few days ago, Chief Analyst from DCFX Futures, Lukman Leong, said there was no sign that the US Central Bank would take a hawkish stance. The minutes also show an overview of the policies the Fed will take.

The Fed emphasized that an increase in interest rates is on track taken by officials, and the central bank is leaning towards a hike of 25 bps, not 50 bps as previously predicted. So when the Fed is not aggressive, this can be used by other central banks.

Including Rupiah, which is considered to have market consensus power. The Rupiah is predicted to move from IDR 14,800 per US dollar to IDR 15,300 in Semester 1 of 2023. But before that, this week's position could be IDR 15,000 per US dollar with BI's firm policy.

In last Week's Trading, Rupiah Ended Above Rp. 15,200 per USD Despite Recording Net Foreign Capital Outflows Reaching 43.88 Trillion Rupiah

"The rupiah will strengthen at the end of the year assuming that there is no threat from geopolitical escalation," said Lukman Leong, an economist from DCFX Futures. In this regard, direct attention goes to the movement of the Rupiah in recent times.

In addition, several positive aspects experienced by the Rupiah were also highlighted. For this reason, monetary policy from Bank Indonesia will support strengthening the Rupiah. 

However, the following note is that Bank Indonesia recorded a very high inflow of foreign capital. Foreign capital from the domestic financial market is said to have reached IDR 640 billion on February 20 to 23 alone.

Meanwhile, the stock market recorded inflows at Rp 230 billion. So that throughout 2023, foreign capital will reach 43.88 trillion Rupiah. This is a sizeable number considering the ups and downs of trading activity.

Bank Indonesia was asked to strengthen coordination with the government and relevant authorities to make policy strategies more strategic. Previously, the Minister of Finance, Sri Mulyani, had said that foreign capital was leaving in several developing market countries.

This was caused by the policy of the United States Central Bank, the FED, which made foreign capital trading in the hawkish zone. Under these conditions, it is stated that global financial markets are becoming full of uncertainty, and high volatility is starting to subside.

This volatility will still be a concern because it is unclear whether to code positive or negative sentiment, and the Rupiah exchange rate could be most affected.

Most recently, the Rupiah was traded at Rp 15,200, still higher than Bank Indonesia's target and many investors. Now we will do so that the Rupiah can strengthen and not affect the Fed's claims. The BI interest rate also determines the market reference.

The Performance of the Rupiah Capital Market is in the spotlight because the Threat of a Recession is considered Increasingly Accurate.

Bank Indonesia also reported that the country's balance of payments managed to increase. But this is the next highlight, namely whether this recession will make the market even more difficult.

It is not surprising that the performance of the Rupiah capital market continues to be in the spotlight. The threat of recession is also increasingly seen as triggering Indonesia's economic turmoil.

But BI firmly emphasizes that an economic recovery is taking place in Indonesia. The capital market now has supporting fiscal reforms so that it can control inflation and purchasing power.

The Rupiah is predicted to experience a significant increase in recent times. Previously, Rupiah was traded in the IDR 15,200 zone. However, due to the increasingly weak Fed policy, it is believed that the exchange rate can exceed Rp. 15,000.