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Rupiah strengthens on Thursday

The rupiah exchange rate reversed a three-day downward trend on Thursday as investors’ worries eased

The Jakarta Post
Jakarta
Thu, August 27, 2015

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Rupiah strengthens on Thursday

The rupiah exchange rate reversed a three-day downward trend on Thursday as investors'€™ worries eased.

The rupiah strengthened by 83 points to Rp 14,050 per US dollar from its previous position at Rp 14,133.

'€œThe market'€™s worries over China are abating,'€ Monex Investindo Futures head of research Ariston Tjendra said, as quoted by Antara news agency on Thursday.

He said that the strengthening of the rupiah was attributable to the fact that China'€™s economy was slowing down, which might reduce the possibility of the US Federal Reserve to increase its rate in September.

However, he added that the rupiah'€™s appreciation against the US dollar might be short-lived as investors were still awaiting for the US'€™s gross domestic product (GDP) report in the second quarter of this year.

'€œBetter-than-expected growth will increase the chances for the US Federal Reserve to raise its interest rate,'€ he said.

It is expected that the US economy will grow by 3.2 percent in the second quarter this year, more than the expected 2.3 percent.

Meanwhile, NH Korindo Securities Indonesia head of research Reza Priyambada said the strengthening of the rupiah was still limited due to the lack of positive sentiment in the domestic economy.

'€œInvestors can be expected to remain cautious if the rupiah continues to depreciate. Indonesia'€™s GDP is not stable enough amid the slowing down of the global economy,'€ he said.

The central bank'€™s median rate recorded that the rupiah exchange rate weakened to Rp 14,128 per US dollar on Thursday from Rp 14,102 the previous day. (ika)

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