Jakarta, KomIT – A sudden and sharp strengthening of rupiah in any Asian Currencies rallied throughout last week starting on Monday, 5th October, astonished many analysts in disbelieved that such sudden inflection point phenomenon of strongest value gain in Rupiah against US dollar could ever happened in the midst of Rupiah crisis since beginning of 2015? Some analysts had different opinions that it was either the Intervention by Bank Indonesia (BI) or the Third Government economic stimulus package or probably some external factor, such as rumor of possible increase of interest rate by The Fed (Quantitative Easing), which was all economic factors (ceteris paribus)?
Or could external political factor such as the 70th Anniversary of Indonesian Military (TNI) on Monday, 5th October 2015 at Indah Kiat port, Cilegon trigger such sharp inflection point that strengthened Rupiah on the afternoon of 5th October after president JKW speech as ceremony Chief Inspector, another Jokowi effect ?
Figures released by BI late on Wednesday (7/10) show the biggest drop of Indonesian Foreign Exchange Reserve fell US$ 3.6 Billion in September 2015 to US$ 101.7 Billion closing on psychological level threshold of US$ 100 Billion, “Save by the Bell” said some analyst usually during critical moment of a boxing match. The Foreign Reserve has fallen 12 percent over the last seven months. Unfortunately, data show that during September 2015 the Rupiah drops most significantly 4.1 percent (3.7% in August 2015) despite of huge intervention by BI in September, just like pouring salt in the ocean; an annihilated reasoning that this rebound was the sole intervention of BI, indeed the Reserved has drop to its lowest level this year and Rupiah only rebound in October 5th , 2015 by 5.6% increased after the President Jokowi speech during the TNI Anniversary. Was the Rupiah rebound just a coincidence?
Previously, Rupiah was continued to weaken to the psychological lowest level of Rp 15,000 (, above Rp 14,700) 2nd October, despite of two previous government economic stimulus to strengthen Rupiah that both failed. Even external factor such as Fed Reserved rumor of increased interest rate was said to cause reversal and panic of US dollar capital outflow from Indonesian market (or Taper Tantrum effect), which causing the weakening of rupiah and had nothing to do with recent strengthening of Rupiah. Thus again External Factor by the Fed was not the reason for the inflection point of strong Rupiah. Furthermore, starting 5th October, Out of 11 main Global Currencies; 8 currencies even show weakening and only 3 show mild increased such as Korean Won; Japanese Yen and Thailand Bath; but rupiah was the champion showing a very steep inflection point.
Now remain the domestic factors at national level that could cause such positive sentiment that drove the unbelievable rebound of Rupiah 8.78 percent last week from Rp 14,719 on Friday (2nd October) to Rp 13,521 Friday(10th October). The Rupiah surged 3.1 percent high on Wednesday as the biggest single day’s gain since December 2008 provided domestic market optimism
On 5th of October there are two significant phenomena, first is the third Government economic stimulus package and the other was 70th TNI Anniversary parade and show of force. Analyzing the previous two economic stimulus packages that show very little effect on strengthening rupiah, on the other hand the second phenomena, 70th TNI Anniversary parade should be the only key that could strengthening of Rupiah with such magnitude as the Jokowi effect. The troops march parade was followed by unique attraction of Modern Integrated Warfare involving hundreds of fighter jets (F16 & Sukhoi); helicopters; Hercules military transport plane; 52 battle ships and submarine and hundreds of Army Tanks and artillery weaponry in an artillery life combat form, seldom displayed at any Global military parade.
Discussion between Rudi Rusdiah, chairman of Computer Association, Apkomindo, Alumni of Lemhannas (National Resilience Institute) PPRA XLII/2008 with foreign diplomats, ambassadors, military attaché and observers that were present in the 70th TNI anniversary celebration revealed positive impressions and report brought back to their corresponding countries that the economic and geopolitics in Indonesia was very conducive and stable. In 2015 many unfavorable phenomena happening such as the worst El Nino since 1998 and global commodity crisis that brought Rupiah down to its lowest level since 1998 Asian crisis. This TNI 70th anniversary triggered positive sentiments that were tweets and send through many Social media such as Twitter, Facebook, Youtube creating positive signals in the monitoring command center and global cyberspace originating from Indah Kiat port, Cilegon. An anomaly that has often forgotten by many economic analyst on the power of social media.
Thousands of civilian, villagers were present and participated enthusiastically in the marching parade showing the close relationship between TNI (military) and civil society; not to mention when President Jokowi approached the crowd of thousands spectators creating positive sentiment. It trigger another ’ Jokowi effect’ and positive signals that Indonesia are politically safe, stable and sound for foreign investments especially Indonesia as the largest archipelago nation with 7,9 million km square of sea, large domestic market and country with rich in natural resources potential, strengthening the value of rupiah and increase the flow of investment to Indonesia. Military Chief, Army General Gatot Nurmantyo referred as “Pesta Rakyat” (People’s party), Strong and Professional TNI together with the People defending Indonesian sovereignty and independent with Minimum Essential Force (MEF) policy.
Even Global Firepower military analyst positioned Indonesia in the 12th Global Rank below US, Russia, China, India, UK, Korea, and Israel; above regional forces Singapore, Malaysia and even Australia. The day after His Majesty Sultan Brunei Darussalam granted the honorific ‘Dato Paduka Seri’ highest recognition on General TNI Gatot Nurmantyo, the Chief of Indonesian National Armed Forces. Hoping that Indonesian Government could maintain last week inflection point of strengthening rupiah until end of this year, where the needs of US currency still high for the following years, a strong TNI and never underestimate the power of positive net-citizen sentiments in Social Media during the Big Data era. Rudi Rusdiah –rrusdiah@yahoo.com
