Rupiah weakens to 13,818 per dollar

JAKARTA. The rupiah exchange rate on Tuesday morning had weakened by 17 points to Rp 13,818 per US dollar from Rp 13,801.

Samuel Sekuritas economist Rangga Cipta said in Jakarta on Tuesday that the rupiah was still suppressed against the US dollar along with other Asian currencies.

“Although the Chinese yuan devaluation issue has calmed down, declines in the prices of oil and other commodities have led the US dollar to appreciate, affecting the rupiah,” he said as quoted by Antara on Tuesday.

The analyst added that Indonesia’s current account deficit, which had widened, and overall balance of payments, which had suffered a deficit, had added pressures to rupiah against the US dollar.

“Market players are still waiting for results of the Bank Indonesia Board of Governors’ meeting. It seems that the central bank will continue to maintain its benchmark interest rate [BI rate] concerning the rupiah’s volatility which remains high,” said Rangga.

Platon Niaga Berjangka analyst Lukman Leong said fundamentally, the national economy was still slow and thus the rupiah had depreciated again against the dollar.

He said circulating speculation on the possibility of a US Federal Reserve fund rate hike in September had increased the market’s worries. US retail sales data, which strengthened again, had given a signal of solid momentum in the country’s economy, he added.

However, Lukman said President Joko “Jokowi” Widodo’s speech on the 2016 State Budget draft bill and his state financial notes on Friday were quite realistic amid the currently fluctuating global economy.

“The most important thing for the government is to remain committed to achieving the assumptions it has announced, such as 5.5 percent economic growth, and to maintaining Indonesia’s inflation rate at the low level of 4.7 percent,” he said.