Rupiah Hits New Low as Gibran Exit, MSCI Fears Rattle Markets

Résumé détaillé

Rupiah fell 0.50% to Rp 18,239 per dollar as Gibran's resignation, MSCI concerns and US rate hike bets weighed on sentiment.

Jakarta. Rupiah weakened further to a new low of Rp 18,239 per US dollar on Thursday, extending its losses despite expectations that Gibran Rakabuming’s resignation as vice president could ease political uncertainty.

Rupiah closed down 90 points, or 0.50%, at Rp 18,239 per dollar, compared with Rp 18,149 in the previous session.

Traze Andalan Futures director Ibrahim Assuaibi said the currency remained under pressure even as Gibran’s resignation could potentially improve market sentiment. However, investors are still assessing the constitutional process, the appointment of a successor and the implications for the stability of President Prabowo Subianto’s administration.

“Investors are still watching the constitutional process of the vice president’s resignation, the appointment of a successor and the implications for the stability of the Prabowo administration. Political certainty is crucial to restoring investor confidence and maintaining financial market stability,” Ibrahim said in a written statement.

People’s Consultative Assembly (MPR) Speaker Ahmad Muzani confirmed on Thursday that Gibran had submitted his resignation letter at the parliamentary complex in Jakarta. Prabowo later expressed his appreciation and delivered a farewell message to Gibran at the Presidential Palace.

External pressures also weighed on the rupiah, particularly geopolitical developments in Eastern Europe and the Middle East.

Russia and Ukraine agreed to a large-scale prisoner exchange during two days of peace talks in Abu Dhabi that ended on Wednesday. However, US mediators said differences remained over key issues, including territorial disputes.

In Iran, security chief Mohsen Rezaei warned of consequences if the United States launched another attack.

Meanwhile, stronger-than-expected US inflation data reinforced expectations that the Federal Reserve could maintain or raise interest rates for longer, supporting the dollar.

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