Rupiah Strengthens to Rp12,200 on Thursday Morning

TEMPO.CO, Jakarta - The rupiah interbank exchange rate in Jakarta on Thursday morning gained by 35 points to Rp12,200 per United States (US) dollar, up from its previous position at Rp12,235 per US dollar. 

The Head of Research at Monex Investindo Futures, Ariston Tjendra, said on Thursday in Jakarta that worries over the slowing, global economy was negating the positive sentiment generated by the robustly recovering US economy, thus the exchange rate of the US dollar would begin to plateau.

"The US dollar is losing against a slew of major world currencies, after it was known through the Federal Open Market Committee (FOMC) meeting that the US Federal Reserve (The Fed) is also worried about the impact of a slowing global economy on the US' economic prospects," said Ariston. 

Ariston added that a number of the Fed's board members believed that an under-performing global economy may hurt US' economic recovery, and that a continued recession in Europe may cause the US dollar to rise even further, possibly hurting its exports and causing inflation.

"The market is consolidating itself at the moment. That said, in overall, the US dollar will continue to gain for a while," said Ariston.

An analyst for Woori Korindo Securities Indonesia, Reza Priyambada, said that even though the value of the US dollar was dropping as a result of the grim International Monetary Fund (IMF) outlook on the global economic growth, it was still highly likely to rebound.

"In periods of a slowing global economy, the demand for safe haven currencies such as the US dollar will be high," said Reza.

ANTARA