TEMPO.CO, Jakarta – The rupiah experienced another correction after taking a slight gain over the greenback at the start of Thursday's trading session. Opening with a 2.0-point gain to 12,188 per US dollar, the rupiah took a downward turn to be traded for 12,197 per US dollar as of 10.00 am Jakarta time.
Samuel Sekuritas analyst Rangga Cipta said told antaranews that the rupiah's movement reflects investors' prediction that Bank Indonesia (BI) will keep its key interest rate (BI Rate) at 7.5 percent.
"[Investors believe] BI will keep its key rate due to Indonesia's wide inflation gap and the fuel price hike plan that will be adjusted to the global oil price collapse, which is expected to keep inflation lower than initial projections," Rangga said as quipped by Antara.
On top of that, Rangga said, the central bank is expected to announce quarter three's trade deficit, which investors predicted to narrow to 3.4-3.5 percent of the GDP.
"The rupiah is likely to continue to weaken against the US dollar," Rangga projected.
Echoing a similar sentiment, Platon Niaga Berjangka futures analyst Lukman Leong said that a relatively friendly political situation in Indonesia has helped prevent the rupiah from sliding even further into the red zone.
Nevertheless, Lukman predicted the rupiah gain over the greenback will be brief, and the currency is still prone to correction as there are still uncertainties surrounding the government's plan raise subsidized fuel prices. (*)