Rupiah Weakens Tuesday amid Fed Interest Rate Uncertainties

TEMPO.CO, Jakarta - The rupiah interbank exchange rate in Jakarta slid by five points on Tuesday, down to Rp12,100 per United States (US) dollar—down from its previous position at Rp12,095 per US dollar. 

An analyst for Platon Niaga Berjangka, Lukman Leong, said that currencies across Asia are expected to experience a limited downtrend amid speculations over the possibility of an interest rate hike by the Federal Reserve Bank of America. 

"Under conditions of uncertainty, market players tend to move to secure their investments. That said, the rupiah remains in a relatively ideal position," said Lukman. 

He also said that domestic investors are still on the lookout for the planned policy directives of the newly-formed cabinet—especially in the economic sphere, where it is hoped that Indonesia's economic resilience and budget deficit could be curbed under the new administration. 

The head of research at Woori Korindo Securities, Reza Priyambada, added the rupiah may regain some of its losses as a number of analyst predicted that the Fed would maintain its core interest rates at its current levels, due to the fact that some economic indicators in the US were not performing as well as experts had initially predicted. 

Furthermore, the high level of investors' confidence on Jokowi-Jusuf Kalla's Working Cabinet is helping prop up the value of the rupiah—keeping its fluctuations within the normal limits, continued Reza. 

"It is hoped that these sentiments are here to stay," finished Reza. 

ANTARA