Rupiah weakens to 11,449 per dollar

JAKARTA. The rupiah exchange rate on Wednesday morning weakened by 85 points to Rp 11,449 per US dollar from Rp 11,364.

“Rupiah weakened again this morning as investors’ interest in the US dollar increased after the latest US economic data released showed some improvements,” said Monex Investindo Futures head of research, Ariston Tjendra, in Jakarta on Wednesday as quoted by Antara.

He said US employment data released over the weekend signaled that the US economy remained solid, resulting in the US dollar to gradually strengthen.

However, the analyst said, global investors still expected Indonesia’s economic fundamentals to improve. A stable inflation rate and the country’s foreign currency reserves, which increased to $102 billion in February, gave the rupiah the potential to strengthen.

“The rupiah is looking positive on the back of improved domestic economic fundamentals,” said Ariston.

He said such an improvement was also attributed to the government’s efforts, together with the Bank Indonesia (BI), to remain focused on tight fiscal and monetary policies. “Such measures are taken to ensure that the economy remains stable,” said Ariston.

Bank Mandiri market analyst Rully Arya Wisnubroto said that although Indonesia’s trade balance in January recorded a deficit, markets still considered it positive and were confident that it would improve in the future.

Rully said the market was optimistic that several policies issued by the government would be effective in narrowing the deficit. (ebf)