Rupiah Back in Green at Tuesday's Close  

TEMPO.CO, Jakarta - The rupiah interbank exchange rate in Jakarta slid by 34 points at Monday's close, concluding trade at Rp12,473 per United States (US) dollar, down from its previous position at Rp12,507 per US dollar. 

An analyst for Platon Niaga Berjangka, Lukman Leong, said that external negative factors surrounding the victory of the Greek opposition that had initially burdened the rupiah was finally beginning to subside. 

"The sentiment surrounding Greece's political sphere plays a big role in influencing the global financial market, including Indonesia. The victory of Greece's opposition party, which is strongly opposed to the austerity measures imposed on Greece's economy, had initially caused worries among investors. But its decision to renegotiate the bailout conditions has alleviated fears of a possible Greek exit from the Eurozone," said Lukman.

The changed circumstances have driven market players to return to riskier currencies, including the rupiah, which drives their appreciation against the greenback.

Lukman continued that Indonesia's economic fundamentals still allowed some room for the rupiah to appreciate against the US dollar. The government's commitment to achieving its economic growth target for 2015, which is set between 5.6-5.8 percent, is also a contributing factor that allows the rupiah to continue its uptrend.

"The rupiah could potentially appreciate towards Rp12,300 per US dollar," continued Lukman.

However, Lukman warned that the conflict between the Corruption Eradication Commission (KPK) and the National Police (Polri) could potentially hold back the rupiah's uptrend. "However insignificant this conflict may seem among Indonesians, investors are keeping a watchful eye on the development of the event," he said.

ANTARA