Analyst: Rupiah to Stabilize on ECB QE
26 January 2015 13:50 WIB
TEMPO.CO, Jakarta - The European Central Bank's (ECB) bond purchase program or quantitative easing become the dominant sentiment that boosted the rupiah rate last week. Analyst says expectation on liquidity creates hope of a yield increase in developing markets—including Indonesia—and reduces investors' interest in making the greenback a safe haven.
Rangga Cipta, an analyst with Samuel Sekuritas Indonesia, said that the €60 billion monthly stimulus—expected to gradually increase production and consumption levels and affect inflation in Eurozone countries—will depreciate the euro.
To Indonesia, a euro depreciation will establish expectations that the state's euro-denominated debt, which is at US$ 7.563 billion as of October 2014, will deplete.
With a strong tendency, Rangga predicts the rupiah will stabilize at a level of less than Rp12,500 per US dollar this week. "At the beginning of the week, the rupiah will still move between 12,400 and 12,500 per US dollar," he said.
PDAT | MEGEL JEKSON
