Rupiah dips deeper despite stimulus package

JAKARTA. The rupiah exchange rate on Thursday morning weakened by 57 points to Rp 14,301 per US dollar from Rp 14,244.

“The rupiah has weakened again against the US dollar. Wednesday’s rupiah strengthening was only technical in nature,” said NH Korindo Securities Indonesia head of research Reza Priyambada in Jakarta on Thursday as quoted by Antara.

The analyst said it was hoped that the first stage of the economic stimulus package announced by the government on Wednesday could be effective in countering the challenges of the global economic slowdown.

“Currently, market players are examining the government’s steps, which are expected to be received well by the market and eventually push up the rupiah,” said Reza.

On Wednesday evening, President Joko “Jokowi” Widodo announced an economic stimulus package aimed at supporting the country’s industry competitiveness, accelerating national strategic projects and boosting investment in the property sector.

Reza said there were hopes that the Chinese government might also issue an economic stimulus package and that it would calm the fluctuations of financial markets in the Asia region.

Meanwhile, Bank Himpunan Saudara financial market analyst Rully Nova added that the potential of the rupiah to strengthen again was still very real as prospects of the US Federal Reserve’s (Fed) fund rate hike in September had continued to recede, some saying that the US economy was not yet strong enough.

“The US economic data is still varied. Furthermore, the US stock market has continued to fluctuate. This shows that the country’s economy is not yet stable,” said Rully.

The analyst said it was expected that the Indonesian government’s plan to allow foreigners to open accounts with US dollar denomination in Indonesia would maintain the availability of foreign currencies in the country. (ebf)