Fed Rate Unchanged, No Hope for Rupiah to Strengthen

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  • TEMPO.CO, Jakarta - The rupiah has yet to show signs of strengthening, although the US Federal Reserve did not increase their interest rate. The condition is not different from previous days when rupiah had weakened, analysts said Monday, September 21.

    “Rupiah is below support target of 14,450,” said Head of Research NH Korindo Securities Indonesia Reza Priyambada told Tempo on Monday.

    Reza said ideally when The Fed interest rate does not rise, the rate of US dollar should have weakened, as dollar is less attractive with less value. “The condition can be taken advantage by other currencies to strengthen.”

    However, the condition does not apply to rupiah. Currently, rupiah remains in the red zone, whereas prior to the announcement from The Fed, US dollar was experiencing a decline following the appreciation of euro towards US dollar and UK pound towards US dollar.

    Previously, Reza said that although it will still likely weaken, Reza expects rupiah to decline lightly as a response to the uncertainty from the announcement of The Fed.

    Reza says it will be useless if we expect the rate of reversal to strengthen towards rupiah. The weakening trend and lack of resistance for rupiah to strengthen still occur.