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Rupiah weakens to 14,112 on Wednesday morning
The rupiah exchange rate on Wednesday morning weakened by 16 points to Rp 14,112 per US dollar from Rp 14,096
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The rupiah exchange rate on Wednesday morning weakened by 16 points to Rp 14,112 per US dollar from Rp 14,096.
Samuel Sekuritas economist Rangga Cipta said in Jakarta on Wednesday that the rupiah had experienced a correction against the US dollar again following market projections that Indonesia's foreign exchange reserve would suffer a decline.
'It is predicted that the foreign exchange reserve data scheduled for release later this week will show a decline again. A declining foreign exchange reserve has a potential to increase worries over Bank Indonesia's [BI] capacity to prevent the rupiah from depreciating further,' said Rangga as quoted by Antara.
The analyst also said issues surrounding a global economic slowdown, which was reported to have grown stronger following the release of Chinese and US economic data, had drawn worries from financial markets.
Rangga said the rupiah exchange rate had also been affected by commodity prices, which experienced declines as the world's oil prices had been corrected again.
'The volatility will remain high for currencies in developing countries, including the rupiah. Moreover, market players are waiting for results from the Federal Open Market Committee [FOMC] meeting in the second week of September,' he said.
Meanwhile, PT Platon Niaga Berjangka analyst Lukman Leong said speculations that the US Federal Reserve (Fed) would increase its fund rate in September had created positive sentiments around the US dollar.
'Some market players still believe that the Fed will increase its fund rate in September,' said Lukman. (ebf)
