Investors Anxiously Await Fed Meeting

TEMPO.CO, Jakarta - Endless pressure continues to depreciate the rupiah exchange rate. Platon Niaga Berjangka’s analyst, Lukman Leong, expects rupiah movements to continue to face pressure this week. Investors are waiting for decisions from the Federal Open Market Committee (FOMC) Meeting on December 17-18. “The meeting agenda is believed to include the decision to taper the Fed’s monetary stimulus starting from early next year.”  

The United States’ good economic data, which keeps improving, has fueled speculations that tapering will be carried out sooner—even though last September, Fed Chairman Benjamin Bernanke ensured that the central bank would not cut the stimulus. Tapering would dry the liquidity of the US dollar, as foreign investors would tend to withdraw their investment portfolios from developing markets.

On the other hand, investors are still disappointed in Bank Indonesia’s decision not to adjust its benchmark interest rate (BI Rate). In the end, the decision has forced investors to reduce their portfolios that are in rupiah.

Early this week, there is a possibility that rupiah will move between 12,050-12,150 per US dollar. Investors appear to be pessimistic of the government’s second package of economic policies. “The policy package, which depends heavily on increasing import taxes, is considered to have no major influence on improving the exchange rate,” Lukman said.

PDAT | MEGEL JEKSON