Rupiah Back to Fundamental Value
15 October 2015 09:10 WIB
TEMPO.CO, Jakarta - The increased likeliness that The Federal Reserve will postpone its interest rate hike plan propelled the rupiah by 1234 points (8.42 percent) last week. Investors doubt that the Fed Rate will be raised this year, given America's economic data that fell below market expectations.
This doubt is also supported by The Fed's own revelation after their meeting in mid September. The country's unmet inflation target due to the global economic slowdown makes the Fed's pessimistic that a monetary normalization would be able to improve economic situations in the states.
Bank Permata economist Josua Pardede said that the small expectation of a Fed rate hike has led a declined interest over the greenback. The corrected profit outlook also makes investors reluctant to accumulate assets denominated in US dollars.
The rupiah is also helped by the government's economic policy packages, which represent real efforts to minimize the impact of global economic turbulences. This manages to build market confidence over the domestic economy in the last quarter of 2015.
"The government's decision to give tax incentives on export proceeds managed to increase the supply of US dollars in the domestic market," he Josua said.
However, Josua said that the rupiah is only returning to its fundamental level after being corrected so deep by the Fed Rate sentiment.
For the remainder of this week, the rupiah is likely to move between Rp13,250 and Rp13,500 per US dollar.
PDAT | MEGEL JEKSON