Analysts See Potential Trump Win as Pressure on Rupiah

Author: Luthfie Febrianto
November 7, 2024

Kamala Harris mengakui kekalahan dari Donald Trump di Pemilu Amerika Serikat (Sumber Foto: ANTARA/foto-Anadolu/py)

SEAToday.com, Jakarta - Analysts are predicting a possible victory for Donald Trump in the U.S. presidential election, which they say could weaken the Indonesian rupiah. Rully Nova, an analyst at Bank Woori Saudara, explained that a Trump win may strengthen the U.S. dollar due to his expected protectionist policies, impacting emerging markets like Indonesia.

Nova emphasized that Trump's approach could increase the dollar's value globally, making it more challenging for emerging economies.

“The U.S. dollar could strengthen further with Trump’s protectionist policies, which may impact emerging markets, including Indonesia,” he shared with ANTARA.

On the other hand, Nova pointed out that if Kamala Harris were to win, there would be different economic implications. Her administration might boost social spending, increasing the issuance of U.S. government bonds to support such policies.

This would also influence dollar movement but in a different direction, as the focus would likely shift toward domestic spending rather than protectionism.

Senior economist Reny Eka Putri from Bank Mandiri noted that the U.S. dollar is already strengthening, spurred by market reactions to early election results.

"The U.S. dollar index rose to 104.7 today, its highest since July 2024, reflecting the dollar’s strength against other major currencies," she explained.

Investors are also watching the battle for control over Congress closely, as the outcome could have substantial effects on future tax and spending policies. Putri added, “Trump’s policies, if he wins, are expected to bring tight controls on tariffs, trade, and immigration, factors that could further support the dollar.”

Recent weeks have seen increased support for the dollar, with what some call a "Trump trade" effect, as his policies are often perceived as inflationary. This focus on Trump’s approach indicates the market’s expectation of a stronger dollar, putting added pressure on currencies like the rupiah.

Writer: Fariz Ahmad Luthfi