DIGIVESTASI - The exchange rate of the Indonesian rupiah against the US dollar strengthened at the close of trading on Tuesday (12/31/2024), ending the year with optimism in the domestic financial markets. According to Refinitiv data, the rupiah closed at IDR 16,090 per US dollar, an appreciation of 0.25 percent compared to the previous close. During the trading session, the rupiah fluctuated, reaching a high of IDR 16,040 per US dollar and a low of IDR 16,170 per US dollar. However, over the course of 2024, the rupiah still recorded a depreciation of 4.51 percent.

This strengthening of the rupiah coincided with a 0.18 percent decline in the US Dollar Index (DXY) as of 3:00 PM WIB, positioning it at 107.93. This condition provided a positive boost for the Garuda currency ahead of the year-end.

Nonetheless, the appreciation occurred amidst less favorable global sentiment. Major US indices posted significant declines, with the Dow Jones Industrial Average falling 418.48 points (0.97 percent) to 42,573.73, the S&P 500 slipping 1.07 percent to 5,906.94, and the Nasdaq Composite correcting by 1.19 percent to 19,486.78. These negative sentiments were exacerbated by low trading volumes leading up to the new year.

Amid this dynamic, the yield on 10-year US Treasury bonds, which had exceeded 4.6 percent last week, continued to pressure emerging-market currencies, including the rupiah. This increased the appeal of dollar-based assets.

Meanwhile, domestic market players appeared cautious, awaiting early-year economic data that could provide clearer guidance regarding monetary policy for 2025. Expectations for a rebound in the new year remain high, supported by the potential occurrence of a “Santa Claus rally,” a market trend that typically delivers positive returns in early January, as observed in historical patterns.

Indonesia's financial markets will reopen on Thursday, January 2, 2025. Market participants will closely monitor economic data developments and Bank Indonesia's policies amid the challenges of global uncertainty.

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