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Rupiah regains 13,300 level after Yellen’s testimony
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Federal Reserve Board Chair Janet Yellen testifies on Capitol Hill in Washington, Wednesday, Feb. 10, 2016, before the House Financial Services Committee hearing on monetary policy and the state of the economy. Yellen said the U.S. economy faces a number of global threats that could hamper growth and compel the Fed to slow the pace of future interest rate hikes. (Associated Press/Susan Walsh)
T
he rupiah strengthened in the spot market against the US dollar, past the psychological level of 13,400 to 13,380 on Thursday morning, as global investors responded to the US Federal Reserve chair’s remarks to the US Congress by selling their greenback.
Bank Permata economist Josua Pardede said the dollar had depreciated significantly against most US trade partners as the main economic indicators in the country showed disappointing results.
Fed chair Janet Yellen said the financial conditions in the US had become less supportive of growth, but the central bank expected to raise interest rates gradually while making it clear the continued market turmoil could halt multiple increases that were previously forecast for 2016.
"When uncertainties and global pessimism surge, the investors will certainly shift their assets. A risk aversion has occurred," Josua said as quoted by Kontan.co.id in Jakarta on Thursday, adding that the situation helped the rupiah to strengthen amid positive sentiments in the local market.
The government is set to announce a revision to the negative investment list (DNI), one of the main points in its 10th economic policy package that will be released on Thursday, providing the rupiah with ground for further gains.
Meanwhile, in the stock market, the Jakarta Composite Index (JCI) inched down by 8.5 points or 0.2 percent to 4,723.99 upon opening. However, the bourse index rebounded by 0.7 percent or 35 points to 4,767.63 at 11:30 a.m. following the appreciating rupiah.
Asjaya Indosurya Securities analyst William Surya Wijaya said the positive local sentiments should drive traders to keep accumulating stocks on Thursday, especially when the rupiah showed a positive trend.
"The positive rupiah is among the factors that supported the JCI. The appreciating currency indicates a sustainable economy," he said as quoted by Antara news agency. (ags)
