Rupiah Opens at Rp13,567 Against Greenback on Tuesday Morning

TEMPO.CO, Jakarta - Rupiah's interbank exchange rate in Jakarta went down by 39 points at the start of Tuesday's trading session, to commence trading at Rp13,567 against the greenback.

"The US Dollar continues to appreciate as its labour market is nearing a healthy condition, which drives up the prospect of an imminent Fed Fund rate hike," said an analyst for Platon Niaga Berjangka, Lukman Leong.

Domestic sentiments, according to Lukman, has yet to be conducive for the Rupiah to sustain an uptrend. The positive boost provided by the number of ongoing infrastructure projects have yet to be accompanied by a parallel increase in Indonesia's import performance.

"Since the majority of components needed for the construction of infrastructure projects are imported, the underperformance of imports could mean that Indonesia's infrastructure projects are being constructed at a rather slow pace," said Lukman.

That said, continued Lukman, the appreciation of the greenback against the Rupiah is still being held back by the low inflation figures in the US, as well as the continued intervention by Bank Indonesia.

"Bank Indonesia is proactively intervening in the domestic market to ensure that the Rupiah does not spiral out of control," said Lukman.

Furthermore, an analyst for Bank Himpunan Saudara, Rully Nova, said that Indonesia's decreasing foreign exchange reserves - which as per July 2015 stands at US$107.55 billion - could mean that Bank Indonesia might not be able to intervene as actively as before.

As such, Rully hopes that the Fed would announce its Fund rate hike as soon as possible, which could decrease the degree of speculation and uncertainty in the market.

ANTARA