Rupiah Slides by 55 Points on Wednesday Evening
1 October 2014 18:52 WIB
TEMPO.CO, Jakarta - The rupiah interbank exchange rate slid by 55 points on Wednesday evening, down to Rp12,172 per United States (US) dollar from its previous position at Rp12,117 per US dollar.
"Indonesia's ongoing deficit is causing the rupiah to lose some of its value against the US dollar," said Rully Nova, an analyst for Bank Himpunan Saudara in Jakarta on Wednesday, October 1, 2014.
Rully said that the recent release by the Central Statistics Agency (BPS) showed a deficit in Indonesia's August trade balance, which amounts to US$318.1 million.
"The oil and gas sector is the main contributor to the deficit, oil and gas imports costed the state US$801.1 million," said Rully.
That said, the negative sentiment from the deficit is balanced out by the positive sentiments from September's inflation figure of 0.27 percent, which suggest that it is still well under government control.
"The inflation rate is still under control, and as such it prevents the rupiah from dipping any deeper," said Rully.
According to the most recent BPS release, the average inflation rate between January-September 2014 stands at 3.71 percent, while yearly inflation rate between September 2013-September 2014 is recorded at 4.53 percent.
However, Rully said the Rupiah may continue to lose in the coming days as positive sentiments surrounding the US economy and the possibility of a Fed rate hike continue to push the US dollar up, while domestic political factors shrink investors' confidence in the next administration's capability to realize its program in the absence of an united House of Representatives (DPR).
Bank Indonesia's middle rate on Wednesday stands at Rp12,188 per US dollar, up from its previous position at Rp12,212 per US Dollar.
ANTARA