Rupiah Drops Below Rp 13,900

TEMPO.CO, Jakarta - Rupiah's interbank exchange rate in Jakarta on Friday, August 21, 2015, slipped by 29 points to begin trading at Rp13,914 per US Dollar - down from its' previous position at Rp 13,885 against the greenback.

"The Rupiah is depreciating against the greenback as there are still no certainty surrounding the US Federal Reserve's plan to raise its' fund rate - which drives investors to seek out safe haven currencies, such as the US Dollar," said the Head of Research for NH Korindo Securities Indonesia, Reza Priyambada in Jakarta on Friday, August 21, 2015.

Amidst the uncertain conditions, according to Reza, any uptrend that the Rupiah might experience in the future will be of a temporary nature - especially considering that there is a lack of a negative sentiment from the domestic sphere.

That said, Reza hoped that Bank Indonesia's (BI) plan to begin a monetary intervention in the domestic foreign exchange market could help alleviate the Rupiah's depreciation.

Reza said that Bank Indonesia is planning to embark on a number of strategies, which includes the strengthening of Indonesia's liquidity management system in the domestic market, the issuance and marketing of bonds in the secondary market, as well as switching from variable rate tender to fixed rate tender in bond auctions in the market.

Meanwhile, an analyst for Bank Mandiri, Reny Eka Putra, hopes that Indonesia's economic performance figures in the next few months would begin to improve, which would attract investors to return and invest in the domestic market.

"Hopefully, Indonesia's economic performance figure - which has showed signs of a slowdown as indicated by a growth rate that averaged at 4.7 percent in the second trimester of 2015 - could improve in the immediate future," said Reny.

ANTARANEWS