The Jakarta Post
Despite the central bank's policy to prop up the rupiah's value, the currency still lingered at around Rp 14,000 per dollar on Tuesday afternoon.
Analysts said that the central bank's steps to protect the currency were deemed insufficient to lift the rupiah from the significant 14,000-mark against the US dollar, the worst level since the 1998 financial crisis.
Antara news agency reported that the rupiah exchange rate traded among banks in Jakarta on Tuesday afternoon strengthened by only 25 points to Rp 14,024 per dollar from Rp 14,049.
Platon Niaga Berjangka analyst Lukman Leong said that the central bank's decision to buy back treasury notes in the secondary market had contributed to the strengthening rupiah on Tuesday afternoon.
However, he admitted that the central bank's step was only short lived amid global market uncertainties.
Lukman said that the strengthening of the US dollar was happening globally as a result of China's economic slowdown. Apart from that, he added, investors were still waiting for the US Federal Reserve's decision to increase the interest rate.
'[These uncertainties] have forced investors to prefer a safer currency, which is the US dollar,' Lukman told Antara news agency.
Meanwhile Bank Himpunan Saudara foreign exchange market observer Rully Nova suggested that the central bank's policy must be accompanied by solid domestic economic growth.
'Investors are hoping for the acceleration of infrastructure spending as it will improve the country's economic fundamentals, which in the end will support the value of the rupiah,' Rully said.
The central bank's median rate recorded that the rupiah weakened to Rp 14,067 per US dollar on Tuesday from Rp 13,998 the previous day. (ika)