TEMPO.CO, Jakarta - Rupiah's interbank exchange rate in Jakarta rose by five points to trade Rp11,955 per United States (US) Dollar on Monday morning.
"Rupiah is back in the green zone as market players took advantage of the slight dip in the US Dollar following the most recent board meeting of the Federal Reserve Bank of America (The Fed), which decided to keep their interest rates unchanged," said an analyst for Indonesian Association of Securities Analyst (AAEI) Reza Priyambada, as quoted by Antara News.
According to Reza, the Fed's decision has pushed some investors to return to trade in the currencies of developing markets, including Rupiah, in search of higher returns. "It is hoped that Rupiah would start to gain again as some investors begin to move away from the low-yielding US dollar," he said.
Lukman Leong, an analyst for Platon Niaga Berjangka, added that the currencies of developing nations are positively impacted by China's decision to inject US$ 81 billion into its economy in a bid to sustain its economic growth rate.
According to Lukman, Indonesia's economic fundamentals are strong enough to defend Rupiah's trading position against the US Dollar in the weeks to come. "Investors are pretty confident about investing in Indonesia - especially if the composition of the new cabinet meets market expectations," said Lukman.
However, Rupiah's exchange rate is still prone to further corrections, especially following the recent survey of The Fed's board members, who wants the US reserve bank to raise interest rates faster than the market had previously expected.
"It's just a matter of time," said Lukman.
ANTARA | ZUBI MAHROFI | MARYATI