Rupiah Closes in Red at Tuesday's Close
3 March 2015 20:14 WIB
TEMPO.CO, Jakarta - The rupiah interbank exchange rate in Jakarta slipped by two points in Jakarta on Tuesday evening to trade at Rp12,962 per United States (US) dollar, down from its previous position at Rp12,960 per US dollar.
"The US dollar index is still experiencing an uptrend against the majority of the world's currencies—including the rupiah—boosted by the possibility that the Federal Reserve of America might raise its fund rate sometime in the middle of the year," said the Head of Research at Monex Investindo Futures, Ariston Tjendra, in Jakarta on Tuesday.
Ariston added that the US Dollar index is still appreciating despite the varying economic performance figures from the US, as investors are confident that the Fed will raise its core interest rate sometime in the middle of the year.
On the other hand, continued Ariston, the situation in Europe was still shadowed by the stagnating flow of credit into the Eurozone, and the declining number of business startups in the area—both of which contribute to the increasing rate of unemployment in the area.
Meanwhile, the head of research at NH Korindo Securities Indonesia, Reza Priyambada, said that the rupiah had initially moved in the green zone before retreating into the red after plenty of short-term currency speculators decided to unload their rupiah holdings in light of the Fed's plan to raise its fund rate.
Furthermore, continued Reza, market players were beginning to respond to Indonesia's recent deflation of 0.36 percent in February, and speculations were beginning to appear surrounding the possibility that Bank Indonesia (BI) may cut its core rate further.
Reza explained that the slashing of BI rate had driven short-term investors to reconsider their investment portfolio and shift their attention to other investment devices with higher yields.
That said, according to Reza, Indonesia's improving trade balance for January 2015 has kept the rupiah from slipping further and it reflected that Indonesia's economic recovery was on the right track.
It is known that the Central Statistics Agency (BPS) records show that Indonesia posted a trade surplus totalling US$709.4 million for the month of January 2015.
ANTARA