Rupiah Heats Up as Ukraine Cools

TEMPO.CO, Jakarta - The rupiah interbank exchange rate edged up by 26 points to trade at Rp11,681 at the end of trading today, up from Rp11,707 recorded on the previous day. 

The head of research of Monex Investindo Futures, Ariston Tjendra, said in Jakarta on Tuesday that external factors relating to the meeting of Ukrainian and Russian presidents had caused exchange rates in the developing world to inch upwards. 

"As the geopolitical conflict in Ukraine cools, it is hoped that the rupiah would continue to gain," he said. 

The disappointing news for the US dollar is worsened by the negative sentiment of investors towards the American market, following the release of disappointing news of the new property sales, which fell short of market expectations. 

Meanwhile, a market analyst from Bank Himpunan Saudara, Rully Nova, said that technical factors caused the strengthening of the rupiah exchange rate towards the US dollar, after dipping under pressure on Monday, August 25, 2014.

Thus, Rully thinks that the rupiah is prone to negative corrections as domestic factors are not conducive for the rupiah to continue its uptrend.

"Internal factors that could assist in maintaining the rupiah's uptrend is still at a minimum, so the rupiah's movements will remain limited," said Rully.

Bank Indonesia's middle rate on Tuesday slipped to Rp 11,715 per US dollar compared to Rp 11,714 yesterday.

ANTARA