TEMPO.CO, Jakarta - Yesterday's money market transaction saw the rupiah dived 149 points (1.3 percent) to 11,971 per US dollar, becoming Asia's currency that was corrected the deepest, down to its lowest level in three months.
Juniman, an economist with Bank International Indonesia, said two factors causing the rupiah's plunge were the greenback's appreciation against major world currencies and the lingering risk of current accounts deficit.
"The combination of external and internal factors caused the rupiah to collapse," he said yesterday.
The strengthening of the dollar was triggered by markets' anticipation of the Federal Economic Committee meeting tomorrow. Ahead of the meeting, investors are already convinced that the Fed will raise interest rates sooner than scheduled, prompting them to buy the dollar as a safe haven.
Domestically, financial markets began to saturate as economic data releases showed no fundamental improvement. The market is worried about the potential of widening deficits and they are still in a wait-and-see stance for president-elect Joko Widodo's cabinet and programs.
"Today, the rupiah will be on a wide range of 11,800 to 12,000 per US dollar," he projected.
PDAT | M. AZHAR