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Rupiah loses more value against the US dollar
The rupiah depreciated against the US dollar in the first minutes of trade on Wednesday morning
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The rupiah depreciated against the US dollar in the first minutes of trade on Wednesday morning.
The currency opened at the level of 11,955 per US dollar weakening from an earlier level of 11,892 per dollar.
Investors remain worried by a possible surge in the price of oil as a result of the conflict in Iraq, chief researcher of Trust Securities Reza Priyambada said as reported by Antara news agency.
An increase in oil prices would put greater pressure on the state budget and on the rupiah, Reza said.
In addition, oil price hike may result in the widening of the deficit in the country trade balance, he said.
The increase in the yield on the government bonds, especially state sharia bonds, would add to the negative sentiment.
"Increase in the bond yield would cause concerns to investors in the country," Reza said.
Meanwhile, rising US inflation would strengthen the dollar over the majority of global currencies prompting the Fed to raise its interest rate earlier than expected, he added.
In addition, the Fed would likely cut its monthly bond purchase program, he said. (hhr)
