Jakarta The rupiah exchange rate traded among banks in Jakarta on Wednesday morning weakened by 37 points to Rp14,022 amid Boris Johnson's election as British prime minister, replacing Theresa May.
At 9:45 a.m. local time, the rupiah depreciated by 37 basis points, or 0.26 percent, to hit Rp14,022 per US dollar, from its earlier value of Rp13,985 per US dollar.
Economist from Samuel Asset Management Lana Soelistianingsih remarked in Jakarta on Wednesday that Johnson is known as the initiator of Britain's exit from the European Union and has vowed to deliver a no-deal Brexit.
His supporter and fellow leader, US President Donald Trump, was prompt in extending his congratulations to the former British foreign minister.
"Trump and Johnson can be partners that strengthen the pattern of new global trade orders, heading towards protectionism. Uncertainties regarding trade protectionism are likely to strengthen," Soelistianingsih remarked.
She noted that Johnson and Trump brought back memories of the 1980s, when the then US President Ronald Reagan and British Prime Minister Margaret Thatcher had shifted the global trade orders, from protectionism to free trade, as she saw a possibility for the two current leaders to reverse such orders back.
Soelistianingsih has forecast the rupiah to continue to decline, reaching between Rp13,990 and Rp14,020 per US dollar.
In the meantime, Bank Indonesia's benchmark rate on Wednesday showed the rupiah's downward movement to Rp14,011 per US dollar, as compared to Rp13,963 per US dollar a day prior.
Source: Antara News