Rupiah Opens at Rp12,480 at Monday's Start
26 January 2015 13:24 WIB
TEMPO.CO, Jakarta - The rupiah interbank trade rate in Jakarta on Monday morning slid by 25 points to trade at Rp12,480 per United States (US) dollar, down from its previous position at Rp12,455 per US dollar.
An economist for Samuel Sekuritas, Rangga Cipta, said in Jakarta on Monday that the euphoria surrounding the European Central Bank's (ECB) obligation buyback plans is balanced out by the negative buzz generated by speculations of a Greek exit from the Eurozone, following the victory of the Syriza party in the elections.
"The situation is predicted to negatively impact the Euro against the greenback, which sparked the general downtrend experienced by a number of global currencies, including the rupiah," said Rangga.
Rangga explained investors feared that a Greek exit would necessitate some financial policy changes, which had previously been operationalized by ECB as Europe's central bank.
The head of research at Woori Korindo Securities Indonesia, Reza Priyambada, added that a Greek exit would complicate the bailout program, which may cause significant consequences in relation to the debt repayment to creditors.
"That said, the rupiah's fluctuations are still regarded as relatively stable despite the heavy blows dealt by the situation in Europe. The value of the rupiah is propped up by the government's optimism in achieving its economic growth target," said Reza.
According to Reza, Indonesia's economic growth target for 2015, which is set between 5.6-5.8 percent, despite its moderate nature, is far higher than the target set in 2014, which opened up chances of a further uptrend for the rupiah.
Furthermore, China's Gross Domestic Product (GDP) that has increased to 7.4 percent has allowed the rupiah to better defend its value. "This is important because China is one of Indonesia's main trading partners," said Reza.
ANTARA