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Rupiah drops to Rp 14,941 per US dollar ahead of FOMC meeting
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A woman waits in line at a money changer in Jakarta on Feb. 28. (Antara/Puspa Perwitasari)
T
he rupiah further weakened on Wednesday morning ahead of the Federal Open Market Committee (FOMC) meeting in which the United States Federal Reserve is slated to decide whether it will increase its reference rate.
According to Bloomberg, the currency was quoted at Rp 14,941 per US dollar at 10 a.m. at the spot market on Wednesday, or 0.16 percent lower from its position the day before. And according to the Jakarta Interbank Spot Dollar Rate (JISDOR), the exchange rate stands at Rp 14.938 per US dollar, or 3 percent lower than Tuesday’s position.
Monex Investindo Futures analyst Ahmad Yudiawan said the rupiah was under pressure as the Fed was expected to increase the Fed Fund Rate on Thursday.
“The Fed Fund Rate hike will boost the demand for US dollar,” he said as quoted by kontan.co.id.
Ahmad said market players would still wait for Fed officials to announce whether the US central bank would make another reference rate hike this year and subsequently further strengthen the US dollar.
Meanwhile, domestically, no significant event could produce positive sentiments that could help the rupiah, Ahmad said, adding that the only possible positive sentiment would be the result of Bank Indonesia’s (BI) boards of governors meeting.
“We are just waiting for a response from the BI board of governors meeting on whatever decision is made in the FOMC,” Ahmad said, adding that if BI increased its seven-day reserve repo rate (7DRRR), it would be an effort to stabilize the rupiah exchange rate. (bbn)
