The rupiah was strong against the United States (US) dollar in trading earlier this week, Monday. Garuda currency strengthened in the middle rate of Bank Indonesia (BI), and in the spot market became the best in Asia.

According to data from BI, the rupiah's middle exchange rate or the Jakarta Interbank Spot Dollar Rate (Jisdor) is currently at Rp. 14,206/US$, up 0.26% compared to last Friday's position.

Meanwhile, in the spot market, the rupiah strengthened 0.16% to Rp 14,210/US$. Although the strengthening of the rupiah is not large, as of 15:16 WIB, there is no major Asian currency that is better than the rupiah.

The rupiah managed to maintain its strength today after the Central Statistics Agency (BPS) reported that Indonesia's exports in October 2021 reached US$ 22.03 billion, up 53.35% year-on-year (YoY) and 6.89% compared to the previous month.

This realization also brought Indonesia's exports back to the highest record in history. Meanwhile, imports were reported to reach US$ 16.29 billion, up 51.06% YoY.

Movement of Various Currencies on the Spot

With the value of exports and imports, Indonesia's trade balance surplus in October amounted to US$ 5.74 billion. The surplus was at an all-time high, surpassing the previous record of US$4.74 billion recorded in August.

The market consensus compiled by CNBC Indonesia previously estimated that exports grew 46.06%, while imports grew 58.35 percent, with a trade balance surplus of US$ 3.89 billion.

In addition to recording a record, Indonesia's trade balance has experienced a surplus for 18 consecutive months. The trade balance surplus will greatly assist the performance of the current account. When the current transaction is getting healthier, the rupiah exchange rate will be more stable.

Meanwhile, the Japanese yen became one of the currencies that weakened against the US dollar, although the weakening was slight and may still reverse direction. While against the rupiah, the yen weakened 0.2% to Rp 124.74/JPY.

The position of the yen against the rupiah is better than last month. On October 20, the yen touched Rp 122.67/JPY, which was the weakest level since February 21, 2020, or before the coronavirus disease (Covid-19) pandemic hit the world.

Japan again experienced a spike in cases (Covid-19) in the third quarter of 2021, even becoming the worst during the pandemic. As a result, social restrictions were tightened again, so the economy contracted again.

But the contraction in the third quarter of 2021 turned out to be much deeper than predicted. Data from the Cabinet Office Japan shows the gross domestic product (GDP) contracted (grows negative) 0.8% from the second quarter of 2021 (quarter-to-quarter/QtQ).

Rupiah Exchange Rate Strengthening in Spot

While in the annualized quarterly period, the contraction is estimated at 3%. The release was well below the results of a Reuters poll showing GDP contracting 0.2% QtQ, and, minus 0.8% year-over-year period.

The rupiah exchange rate was at Rp14,201 per US dollar in spot market trading on Monday afternoon. This position rose 17.5 points or 0.12 percent from Rp. 14,219 per US dollar.

Meanwhile, the reference rate of Bank Indonesia (BI), The Jakarta Interbank Spot Dollar Rate (Jisdor) puts the rupiah at Rp14,206 per US dollar or strengthened from the previous Rp14,243 per US dollar.

Analyst and Director of PT TRFX Garuda Berjangka Ibrahim Ascustombi said investors responded positively to the realization of the trade balance surplus which reached US$5.73 billion as of October 2021.

This figure was higher than the previous month's US$4.37 billion. Ibrahim explained that the surplus occurred because the value of exports was higher than imports.

In detail, exports amounted to US$22.03 billion, and imports were only US$16.23 billion. According to him, the rupiah will move in the range of Rp14,180 per US dollar to US414,220 per US dollar.