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Market appreciate fuel hike as rupiah strengthens against US dollar

Tempo - September 6, 2022

Jakarta (Bisnis.com) – The Indonesian rupiah opened today's trade, September 6, with a gain on the US dollar. According to Bloomberg's data, the rupiah climbed 0.13 percent to trade or Rp14,887.5 per US dollar, while the greenback index weakened 0.26 percent to 109,535.

One of the factors affecting the rupiah's movement is Indonesia's domestic fuel policy. President Joko Widodo last week announced a price hike for subsidized fuels Pertalite and Solar by around 30 percent.

Laba Forexindo Berjangka director Ibrahim Ascustombi said that even though the subsidized fuel hike will increase inflation, raise interest rates, and harm household consumption in the short term, the market appreciates the policy.

"This decision will eliminate the hovering policy that makes foreigners reluctant to buy assets in rupiah," he said.

Yesterday, the Financial Services Authority's Board of Commissioners' chief Mahendra Siregar said that the fuel hike policy was "hard, but had to be done". The decision, he said, provides clarity over the government's stance to continue implementing sustainable fiscal policies amid the ongoing global uncertainties over oil prices.

The rupiah's appreciation against the US dollar this morning was joined by other Asian currencies including the Japanese yen by 0.09 percent, the Singapore dollar by 0.07 percent, the Korean won by 0.08 percent, and the Thai baht by 0.4 percent.

Source: https://en.tempo.co/read/1630985/market-appreciate-fuel-hike-as-rupiah-strengthens-against-us-dolla