TEMPO.CO, Jakarta - The rupiah continues to sag down to Rp13,539 per US dollar at the end of last week, pressured by the United State's second-quarter GDP growth to 2.3 percent. The US' GDP improvement alleviated investors' belief that The Federal Reserve's plan to raise interest rates will materialize before 2015 ends.

Bank Internasional Indonesia economist Myrdal Gunarto said the increased possibility of a Fed Rate hike this year became the main driver of the greenback's gain during the past week.

The release of the FOMC minutes, in which The Fed recognized improvements in the US labor market, asserted that the country's economic recovery is on track.

"Fed's statement about labor improvement boosted the market's optimism about a Fed Rate hike in the near future," Myrdal said yesterday.

Myrdal said the Fed no longer needs confirmation of non-farm payrolls growth. The US' unemployment rate that dropped to 5.3 percent is seen as a sufficient indication that the labor market is improving.

Nevertheless, Myrdal said the rupiah depreciation is also related to concerns of Indonesia's economic performances in the second quarter. The domestic GDP—expected to grow below 5.0 percent—will lower the demand for rupiah.

July's inflation data, which is scheduled to be released today, will be the signal of GDP growth quality. If inflation rate is considered too low, investors would see it as a decline in purchasing power. "If July's inflation is considered good, there is a chance that Bank Indonesia will use it as momentum to conduct massive intervention," he said.

MEGEL JEKSON (PDAT)