Rupiah Opens at Rp12,436 per US Dollar on Thursday Morning

TEMPO.CO, Jakarta - The rupiah interbank exchange rate in Jakarta went up by 40 points to trade at Rp12,436 per United States (US) dollar, up from its previous position at Rp 12,476 per US dollar. 

"The rupiah is on an uptrend, in line with the majority of Asian currencies, as investors are expecting the European Central Bank (ECB) to engage in quantitative easing (QE), which will drive up bond sales," said an economist for Samuel Sekuritas, Rangga Cipta, in Jakarta on Thursday. 

Rangga said the ECB's capital injection had been long awaited by global investor, as such, it is expected to help the rupiah sustain an uptrend. "The rupiah still has some room to move. That said, investors should remain vigilant, especially if the ECB's policy directive fails to meet the expectations of investors," he said. 

Rangga said the ECB was due to announce its aggressive financial stimulus, which is geared toward boosting the economic growth in the Eurozone. 

An analyst for Bank Himpunan Saudara, Rully Nova, added that the Bank of Japan (BOJ) was sticking to its plans to boost its financial stimulus in order to meet its inflation target that was currently set at two percent, which was expected to allow the yen and subsequently, the rupiah, to appreciate against the greenback. 

Furthermore, investors are beginning to unload their US dollar-denominated assets to profit from its recent appreciation, which was expected to help the rupiah regain some of its losses. 

Rully also said that the rupiah's gains were only temporary, as the currency was still shadowed by Indonesia's ongoing trade deficit. "In the long run, the rupiah will continue to be influenced by its ongoing transactional balance," he said. 

ANTARA