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Rupiah strengthens 49 points to Rp 12,856
The rupiah interbank trade rate strengthened by 49 basis points to Rp 12,856 per US dollar in Friday's first trading session from Rp 12,905 per dollar in previous trade
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he rupiah interbank trade rate strengthened by 49 basis points to Rp 12,856 per US dollar in Friday's first trading session from Rp 12,905 per dollar in previous trade.
Korindo Securities Indonesia head researcher Reza Priyambada said the rupiah appreciated again amid investor euphoria over positive economic data on the domestic economy, such as Indonesia's trade balance registering a surplus.
"The rupiah appreciated as predicted after the disclosure of positive data on the local economy," Reza said as quoted by Antara news agency.
He said that global currencies faced pressure from the US dollar because of speculation on the postponement of a planned hike in the US interest rate following unfavorable data on the US economy.
Chief market analyst of ForexTime (FXTM) Ltd. Jameel Ahmad said that from existing indicators the Federal Reserve was likely to increase its rate in September.
"There are worries that the exchange rate will weaken and there will be capital outflow because funds in stock markets in a number countries will be moved to the US. Indonesia needs to convince and invite investors to remain here," he said.
According to him, Indonesia will be able to minimalize risks if the government manages to control the inflation rate, which reached 6.3 percent as of March.
"Several Bank Indonesia policies have thus far been satisfactory in maintaining the exchange rate, but if the Fed raises its rate, BI needs to be flexible to offset it," he said. (hhr)
