Rupiah Remains in the Red on Tuesday`s Start

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  • Ilustrasi kurs rupiah dan mata uang Indonesia. Getty Images

    Ilustrasi kurs rupiah dan mata uang Indonesia. Getty Images

    TEMPO.CO, Jakarta - Rupiah's interbank exchange rate in Jakarta on Tuesday morning slipped by seven points to commence trading from Rp14,273 per US Dollar.

    An economist for Samuel Sekuritas, Rangga Cipta, said that the Rupiah is depreciating against the US Dollar, along with the majority of the world's currencies, as uncertainties surrounding the Federal Reserve Bank of America's plan to raise the US Fund rate.

    "The uncertainty has allowed the greenback to continue its appreciation against the world's currencies," said Rangga.

    Furthermore, Indonesia's economic prospects, which has slowed somewhat, is also putting some pressure on the Rupiah - economic fundamentals that does not look as bright as previously predicted is starting to drive out foreign capital from the country.

    "The government plans to use a variety of stimuli to drive economic growth - but these plans will not benefit the economy significantly unless the government also works to increase its budget absorption," said Rangga.

    That said, Rangga also said that it appreciates Bank Indonesia's (BI) commitment to keep the Rupiah within a stable, narrow band. "Without intervention, the Rupiah is at risk of sliding further - especially since commodities prices are collapsing," he said.

    An analyst for Bank Himpunan Saudara, Rully Nova, said that the Rupiah could still see some uptrend in the future - mostly of a techincal nature - but a long-term uptrend is not on the table at the moment, as Indonesia's economic fundamentals still fails to meet the market's expectations.

    "A slowing economic growth is one of the factors which prevents the Rupiah from resuming its uptrend," said Rully.