TEMPO.CO, Jakarta - The rupiah interbank exchange rate in Jakarta rose by 24 points to trade at Rp11,951 per United States (US) dollar at the end of trading on Tuesday evening, up from Rp11,975 per US dollar.
"The rupiah is gaining amidst the lack of positive sentiment, both internally and externally," said Lukman Leon, an analyst for Platon Niaga Berjangka in Jakarta on Tuesday.
According to Lukman, technical factors are causing the rupiah to bounce back after experiencing several days of downward trend in the past couple of days.
He added that this year's domestic inflation, which is expected to be in line with the government's target, is a contributing factor to the rupiah's gain. For the past few months, Bank Indonesia (BI) has been able to rein in inflation and keep it within its target range of 4,5 percent, give or take one percent.
According to Lukman, the market is also upbeat about the new administration's capacity to continue improving Indonesia's economy, which is reflected by the gains of the rupiah.
An analyst for Monex Investindo Futures, Zulfirman Basir, added that China's positive manufacturing index and a dip in global oil prices have balanced out the fear among investors within the market about investing in an economy with an ongoing transactional deficit, such as Indonesia.
"Those kinds of positive news also contribute to the gains experienced by the rupiah against the US dollar," said Basir.
Meanwhile, BI's middle rate on Tuesday showed a slight dip to Rp11,987 per US dollar, down from Rp11,972 per US dollar.