TEMPO.CO, Jakarta - The rupiah interbank exchange rate in Jakarta appreciated by 31 points on Tuesday morning to start trading at Rp11,994 per United States (US) dollar, up from its previous position at Rp12,025 per US dollar.
"The euphoria surrounding yesterday's inauguration continues to boost the value of the rupiah, pushing it above Rp12,000 per US dollar," said Rully Nova, a market analyst for Bank Himpunan Saudara in Jakarta on Tuesday.
Rully added investors hoped the new administration would continue the Indonesian Economic Acceleration and Expansion Masterplan (MP3EI), as such projects would furnish the Indonesian economy the boost it needs to take off.
"The development of infrastructure projects will lure further investments, which can push Indonesia's domestic economic growth," said Rully.
On the other hand, speculations surrounding the global economic growth slowdown has pushed the Federal Reserve Bank of America to postpone its planned interest rate hike, which causes the US dollar to lose some of its value against a majority of the world's major currencies.
An economist for Samuel Sekuritas, Rangga Cipta, said that the rupiah is gaining despite China's slowing Gross Domestic Product (GDP) growth because its value is being propped up by the euphoria surrounding the swearing in of Joko Widodo as the seventh president of Indonesia.
"The direction of China's GDP projection poses a credible threat to all Asian currencies, including the rupiah," said Rangga, who said that the future direction of the rupiah would be decided when Joko Widodo announced the composition of his cabinet.