Rupiah Closes in the Red on Friday's Closing  

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  • TEMPO/Eko Siswono Toyudho

    TEMPO/Eko Siswono Toyudho

    TEMPO.CO, Jakarta - Rupiah's interbank exchange rate in Jakarta slipped by 40 points at the end of Friday's trading session to close at Rp 13,145 per US Dollar - down from its' previous position at Rp 13,105 per US Dollar.

    An analyst for Bank Himpunan Saudara, Rully Nova, said in Jakarta on Friday, May 22, 2015, that the Rupiah is depreciating against the greenback after having gone on an uptrend on Thursday because of the uncertainties surrounding the Federal Reserve Bank of America's plan to raise its' Fund Rate.

    "External sentiments are still the main driving force behind the Rupiah's fluctuations. As long as uncertainties remain, volatility will remain high," said Nova.

    Psychologically speaking, according to Nova, uncertainties in the global market will drive investors towards safe haven assets - which includes the US Dollar.

    The Head of Research for NH Korindo Securities Indonesia, Reza Priyambada, said that the Rupiah could still appreciate further as the government gears up to issue Islamic Bonds for the global market later on in the year.

    According to Reza, the issuance of Islamic bonds will help the government fund its' ambitious infrastructure projects, and will fortify Indonesia's current fiscal standing - as a result, Indonesia's economy could potentially grow further in 2015.

    The greenback on the other hand, said Reza, is still being shadowed by the result of the recent Federal Open Market Commission (FOMC), which indicates that it is still premature to raise the Fed's Fund rate, especially in light of the recent slowdown experienced by the US economy.

    Bank Indonesia's (BI) middle rate on Friday went up to Rp 13,136 per US Dollar - up from its' previous closing position at Rp 13,150.