Rupiah Continues to Strengthen

TEMPO.CO, Jakarta - Indonesian currency continued to appreciate on Friday, up 439 points to Rp13,448 against the US dollar from the previous close of Rp13,887.

"The rupiah appreciated below Rp13.5 thousand per US dollar. The shift in the markets projection on the Feds plan to raise its interest rate in 2016 has been used by market players to reinvest in risky currencies, including the rupiah," stated Rully Nova, a money market observer from Bank Himpunan Saudara.

He noted that during the Federal Open Market Committee meeting held last night, the United States central bank officials hinted that they would continue to hold the rate at a low level as economic growth in the United States is still in a risky phase.

"The signal lends a negative sentiment to the US dollar," he pointed out.

Before the Fed would raise its interest rate, market players have reinvested in assets in developing countries due to their fields, which are more attractive than that in the United States.

In the domestic market, players have pinned high hopes on the governments economic policy packages issued recently, thereby increasing positive sentiment that led to the rupiahs appreciation, he noted.

"The domestic sentiment also contributes to the rupiah appreciation," he pointed out.

Chief researcher of Korindo Securities Indonesia, Reza Priyambodo, stated that the economic policies produced by the government and Bank Indonesia had boosted the US dollar supply in the country.

"The third package of economic policies have been considered to be more concrete to boost the domestic economy in the short term, and this policy has helped make the rupiah move into the positive territory," he remarked.

The middle rate of the rupiah at Bank Indonesia was up to Rp13,521 from the previous value of Rp14,809.

ANTARA