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Rupiah weakens on Tuesday afternoon
The rupiah exchange rate traded among banks in Jakarta on Tuesday afternoon weakened by 123 points to Rp12,973 per US dollar from Rp 12,850
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he rupiah exchange rate traded among banks in Jakarta on Tuesday afternoon weakened by 123 points to Rp12,973 per US dollar from Rp 12,850.
'The rupiah dropped quite sharply against the US dollar amid expectations that Indonesia's economy will slow down this year,' PT Platon Niaga Berjangka analyst Lukman Leong said as quoted by Antara in Jakarta on Tuesday.
He said several countries had cut their interest rates in order to push up their economies. As such, it was hoped that Bank Indonesia (BI) would take similar steps so that Indonesia's economy could continue to expand.
'The current BI rate of 7.75 percent is considered to be quite high, holding back the domestic economy,' said Lukman.
He said that if BI did not cut its interest rate, inflation would have to be controlled; thus, the government must act to prevent fluctuations in domestic basic commodity prices.
The analyst said the 60th anniversary of the Asian-African Conference was a chance for the government to establish economic cooperation with other countries, so there would be positive expectations in the financial market.
Meanwhile, Monex Investindo Futures head of research Ariston Tjendra said the US dollar had received support in the global financial market on increased worries that Greece could experience debt default, which could lead it to it leaving the eurozone.
'The latest developments on Greece's debts are the main focus of investors. On the other hand, investors are still worried by the Fed fund rate hike,' he said.
The BI median rate recorded that the rupiah weakened to Rp 12,942 per dollar on Tuesday from Rp 12,875 the previous day. (ebf)(++++)
