Regional Elections Law Can Weaken Rupiah
2 October 2014 11:26 WIB
TEMPO.CO, Jakarta - A release of economic data by the Central Statistics Agency (BPS) has successfully saved the rupiah from a downturn. However, the rupiah is still prone to weakening due to the political turmoil after the passage of the Regional Elections Law by the House of Representatives.
In trade closing on Wednesday, the rupiah edged up by 53 points (0.34 percent) to level 12,135. PT Equilibrium Komoditi Berjangka director Ibrahim said the rupiah was only driven by positive domestic economic data. Inflation of 0.27 percent and trade deficit of US$318.1 million brought positive expectations on domestic economic performance. “Interests in the rupiah rose,” he said.
According to Ibrahim, the strengthening of the rupiah was quite surprising amid liquidity pressure from The Fed and domestic political issues. He added the rupiah was also still affected by the simmering political situation stemming from the Regional Elections Law polemic. The plan to issue a Government Regulation in Lieu of Law (Perpu) by President Susilo Bambang Yudhoyono to annul the Regional Elections Law is unable to become a positive catalyst to boost the rupiah.
The rupiah is predicted to weaken again on Thursday. Investors are being realistic by paying attention to their safe-haven assets and releasing risky assets. The rupiah is estimated to move to level 12,100-12,175 per US dollar.
MEGEL JEKSON
