Rupiah Climbs with Unchanged BI Rate
13 June 2014 02:50 WIB
TEMPO.CO, Jakarta - Bank Indonesia's (BI) decision to keep its benchmark interest rate (BI Rate) at 7.5 percent served as a positive sentiment to the rupiah against the US dollar. Market participants to regain confidence in purchasing assets denominated in the currency allowing the rupiah to appreciate. In yesterday trade, the rupiah closed 20.5 points (0.17 percent) higher to Rp11,789.5 per US dollar.
Economist Lana Soelistianingsih from PT Samuel Aset Manajemen acknowledged that the BI's decision to keep the BI Rate had allowed the rupiah to strengthen. Lana said that, amid the lack of positive domestic sentiment, BI's policy was able to restore investors trust in the rupiah.
"To market participants, [BI's decision] not to change the BI Rate means allowing the Indonesian economy to continue growing," he said.
The central bank's policy in maintaining its key rate also caused an increase in liquidity. To maintain liquidity, banks raise their savings accounts' interest rates. According to Lana, there are concerns that this condition will further decelerate the performance of the domestic economy.
In today's trade, the rupiah is expected to move in the range of Rp11,750 to Rp11,850 per US dollar level.
MEGEL JEKSON
