Rupiah Likely to Stay Damp all Week

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  • TEMPO/Eko Siswono Toyudho

    TEMPO/Eko Siswono Toyudho

    TEMPO.CO, Jakarta - Analyst projected the greenback uptrend to keep the rupiah down this week. Daru Wibisono from Monex Investindo Futures estimated the dollar appreciation will still be a road block for the rupiah to move upwards; a trend predicted to last until early next year following the Fed's plan to raise interest rates.

    "The sentiment is making investors tend to accumulate their dollar holdings, correcting the local currency," he said yesterday.

    Bright prospects on the American economy give the greenback a strong hold in global markets. Last week, the US unemployment rate dropped to 5.8 percent, creating speculations that the Fed Rate will be raised sooner than expected.

    The rupiah is also withheld by the surfacing protests against the government's plan to raise subsidized fuel prices. The government is seen as taking too much time in deciding when the hike will take place, sparking a political turmoil that is not investment-friendly.

    Investors' trust on the rupiah after plunged deeper after the economic growth was cut to 5.1 percent. There is also the sentiment from political uncertainties stemming from the dualism of leadership in the House of Representatives (DPR).

    This week, the rupiah is expected to sway in range of 12,100-12,200 per US dollar. If fuel prices are raised this week, the rupiah is expected to weaken further to around 12,200-12,250 per US dollar.