The exchange rate of the rupiah strengthened against the United States dollar (US) in trading Friday (07/22/2020) and posted a quattrick alias 4-day strengthening streak. The warming of US relations with China has hampered the rate of strengthening of the rupiah today, while the development of vaccines from within the country still supports the strengthening of the rupiah.
Launching Refinitiv data, the rupiah opened trading today at the level of Rp 14,500 / US $, strengthening 0.34% on the spot market. Rupiah appreciation continued up to 0.62% to Rp 14,460 / US $.
But afterward, the rate of the Garuda Currency relaxed, the strengthening was trimmed to end trading at the level of Rp 14,540 / US $ to strengthen 0.07% in the spot market. With a thin reinforcement similar to the James Bond film agent code, the rupiah successfully posted a quattrick alias 4 days of reinforcement in a row.
Although it strengthened slightly, the rupiah was one of the 3 major Asian currencies that rose against the US dollar today. The Japanese Yen became the Asian champion this time with a 0.6% gain at 15:14 WIB.
The sharp pace of the strengthening of the rupiah today has slackened due to the heating up of US-China relations which has worsened market sentiment. A stronger yen, while the majority of other major Asian currencies are weakening, is an indication of worsening market sentiment.
Conflict of two world economic giants sharpened this week after Wednesday local time, Washington ordered the Chinese government to close the consulate in Houston, the State of Texas. Beijing is accused of spying and endangering national interests.
US China Conflict Makes Rupiah Stronger
"The Chinese consulate office in Houston was closed to protect the intellectual property rights and privacy of the US people," said a written statement from the US Interior Ministry. The Chinese government was given 72 hours to close the office and vacate the building.
US suspicion came after smoke emerged from the consulate's office. Several sources in the White House's inner circle revealed that there was a document burning. IHS Markit Vice Chairman Daniel Yergin said the deterioration in US-China relations that had taken place since mid-2018 sent the two countries towards a cold war.
"The current situation between China and the US is not something we want to see," wrote the Chinese Foreign Ministry, as reported by CNBC International.
"The responsibility lies with the United States. We once again ask the US to revoke the wrong decision to create good conditions for both countries, relations are back to normal."
Driving Factors Rupiah Rise
The deterioration in relations between the two countries that triggered a trade war triggered an economic slowdown last year. If this happens again, the global economy is at risk of becoming more vulnerable amid a coronavirus pandemic (Covid-19) that has triggered a recession everywhere.
Before today, the rupiah has posted a 3-day winning streak, and the last 2 days won the Asian championship. The reason, the coronavirus vaccine arrived in Indonesia and was immediately produced if it had passed clinical trials.
On Wednesday, President Joko Widodo through his Twitter account revealed that Indonesia will soon hold the third phase of vaccine trials. If successful, Bio Farma will produce a vaccine with a capacity of 100 million doses per year.
Holding pharmaceutical BUMN, PT Bio Farma (Persero) said it had prepared a production facility to start producing the Covid-19 vaccine which will begin in the first quarter of 2020, with a note if the vaccine was declared to pass the third phase of clinical trials.
This third phase of clinical trials is carried out domestically and will begin in August 2020. This morning, spokesperson for the Covid-19 handling unit Wiku Adisasmito reported positive news on the development of the coronavirus vaccine in Indonesia. Wiku said there had been several collaborative initiatives undertaken by Indonesia to speed up the corona vaccine.
