Greenback Correction Won't Last: Analyst  

TEMPO.CO, Jakarta – The US dollar depreciation against major world currencies helped the rupiah to gain. In yesterday's money market transaction, the rupiah won 26 points (0.22 percent) to close at 11,682 per US dollar. The rupiah strengthened with other Asian currencies against the greenback, except for the Indian rupee was slightly corrected.

Juniman, an economist from Bank International Indonesia (BII), said the greenback correction benefits the rupiah. However, fundamentally the dollar still holds a very strong position. Expectations that the US jobless claims will decline and the consumer confidence index will increase further reinforced investors' confidence in dollar.

Therefore, Juniman said, the greenback correction will only be brief, as the need for safe havens never subsided. What is actually happening, he continued, is that investors are dumping their dollars temporarily; transferring their money to investments that generate higher yields such as the stock and bond markets.

"One day [the dollar] will rise again," said Juniman.

Today the rupiah is expected to move between 11,600 and 11,750 per US dollar, lingering in that range until there is a significant change of the trade and current accounts balance. "Our markets are sensitive to fundamentals. As long as the balances remain in deficit, the demand for US dollar will continue to rise," said Juniman.

PDAT | M. AZHAR