TEMPO.CO, Jakarta - Rupiah's interbank exchange rate in Jakarta went up by 39 points Rp12,107 per United States (US) Dollar at the start of Monday's trading session - up from its previous position at Rp12,146 per US Dollar.
"The majority of Asian currencies are appreciating against the US Dollar, following China's decision to cut its core interest rates," said Ariston Tjendra, the head of research at Monex Investindo Futures in Jakarta.
Ariston said that China cut its interest rates in a bid to stoke its economic growth, which eases worries among investors on China's future growth prospects.
China's Central Bank cut its one-year interest rate by 25 points to 2.75 percent, while interests for one-year loans is reduced by 40 points to 5.6 percent.
"Indonesia is one of China's major trading partner, which will benefit if China's economic growth picks up as China's growth will increase the appeal of riskier markets among investors," said Ariston.
On the other hand, the euphoria surrounding the recent cuts to fuel subsidy is beginning to wane, according to Ariston, who hopes that the government would commit to spend more on infrastructure projects which will drive Indonesia's economic growth in the future.
"It is hoped that the government would commit to building more infrastructure, which will consequently improve Indonesia's economic outlook," said Ariston.
ANTARA | ZUBI MAHROFI | AA ARIWIBOWO