Rupiah Weakens as China's Economy Slows Down  

TEMPO.CO, Jakarta - The slowing manufacturer data from China, followed by the weakening Chinese Yuan, has caused pressure for regional currencies against United States dollar. On today's trading session, Rupiah still stands at 11,620 per US dollar with no sign of strengthening.

Economist from Samuel Management Asset Lana Soelistianingsih, said that the combined negative sentiment originating from inside and outside the country cause Rupiah to slump.  "Slowing Chinese economy and uncertainty of domestic political coalition may further weaken Rupiah," Lana said on Thursday, April 24, 2014.

HSBC China manufacturer data on March 2014 was recorded at a level of 48.3, or below the expansion zone and caused economic uncertainty in the country. The downturn of China's economic condition will surely affect Indonesia's import demands as China is one of Indonesia's export market.

In addition, domestic political condition following the recent legislative election has failed to convince investors.

Nevertheless, Lana explained that Indonesia’s fundamental economy is still relatively well-maintained, even Bank Indonesia indicated a surplus trade balance in March, which amounts to US$ 500 million that would help generate positive sentiment towards rupiah.

PDAT | M. AZHAR