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Rupiah strengthens to 11,743 in evening trading
The rupiah inter bank trade rate strengthened by 52 points to Rp 11,743 per US dollar in Jakarta on Monday evening, from the previous rate of Rp 11,795 per dollar
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he rupiah inter bank trade rate strengthened by 52 points to Rp 11,743 per US dollar in Jakarta on Monday evening, from the previous rate of Rp 11,795 per dollar.
Financial market observer from Bank Himpunan Saudara, Rully Nova, commented that foreign investors still had faith in the Indonesian economy's potential growth in the shadow of negative global sentiment exacerbated by geopolitical crises in Ukraine and Gaza Strip.
'There is still optimism among investors on Indonesia's financial market. That is why it is gaining on the US dollar,' Rully said on Monday as quoted by Antara news agency.
The observer added that the rupiah's short term gains could still be sustained following a report that the inflation rate for July reached 0.93 percent, which was considered relatively low due to Ramadhan.
However, he added that the rupiah's movement needed to be watched with caution in the long run, following a report released by the Central Statistics Agency (BPS) showing that Indonesia's US$305.1 million trade deficit raked in June.
'For the long run, the rupiah is still surrounded by negative sentiment from the country's trade balance,' he said.
Rully hopes the incoming government will focus on stabilizing the trade balance, so as to not reach another deficit in the future.
Meanwhile, he reminded that there was still market anxiety regarding plans by the US Federal Reserve to raise its interest rate, which would affect the rupiah's strength. (dyl/nvn)
