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Rupiah closes at Rp 12,492 per dollar on Wednesday
The rupiah interbank trade rate in Jakarta in Wednesdayâs final trading session weakened by 22 basis points to Rp 12,492 per US dollar from Rp 12,470 per US dollar in earlier trade
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he rupiah interbank trade rate in Jakarta in Wednesday's final trading session weakened by 22 basis points to Rp 12,492 per US dollar from Rp 12,470 per US dollar in earlier trade.
'The rupiah weakened in the closing session since market players were waiting for the outcome of the Federal Reserve meeting. If the Fed decides to postpone its plan to raise its rates, the rupiah will appreciate,' Bank Himpunan Saudara analyst Rully Nova said, as quoted by Antara news agency.
From the domestic market, he said the rupiah's depreciation was triggered by the market projection of the country's higher inflation rate and the trade balance deficit.
'The market players expect that Indonesia will record higher inflation, even though it will be relatively stable. The December [2014] trade balance is forecast to have suffered a deficit,' he explained.
He said, however, that positive sentiment from the European Central Bank (ECB)'s quantitative easing policy could help balance negative sentiment from the US Fed and the country's macroeconomic data.
PT Platon Niaga Berjangka analyst Lukman Leong added that the ECB's policy had encouraged market players to enter risky assets such as the rupiah.
In addition, Lukman said that the nation's economic fundamentals would remain healthy and investors were optimistic that 5.6 percent gross domestic product (GDP) growth could be achieved by the end of 2015.
This would help strengthen the rupiah.
Meanwhile, Bank Indonesia data showed that the domestic currency depreciated to Rp 12,498 per US dollar in Wednesday's closing trade from Rp 12,493 per US dollar in the previous trade. (nfo)(+++)
