The Jakarta Post
The rupiah exchange rate was recorded at Rp 13,793 against the US dollar on Thursday morning, weakening by 86 points from Rp 13,707 recorded on Wednesday, according to the Jakarta Interbank Spot Dollar Rate (JISDOR).
Assistant to Bank Indonesia’s (BI) economic and monetary policy department head Dody Budi Waluyo said in Jakarta on Thursday that optimism in the US economy, as indicated by a speech by Federal Reserve chief Jerome Powell, had affected the strength of Indonesia's currency.
“In his speech, Powell spoke of the country's future economic improvement and lower inflation rate” said Dody as reported by Antara.
He said, however, that the solid domestic situation, particularly the controllable inflation rate, would curb further depreciation of the rupiah's value. “We will not see further depreciation because of domestic factors,” Dody added.
Meanwhile, securities firm Binaartha Sekuritas analyst Reza Priyambada said market players had released the currencies of developing countries, including the rupiah, after Powell’s optimistic speech about his country's economy.
“Powell’s statement also strengthened the assumption that the Fed would further increase its reference rate,” said Monex Investindo Futures research head Ariston Tjendra.
Previously BI Governor Agus Martowardojo said the rupiah`s exchange rate would continue to be volatile until the Fed announced its reference rate policy on March 20 or 21.
"We realize the dynamics and see them as normal. The Fed is expected to raise its rate in March. Afterwards, the situation will be stable," he said on the sidelines of the BI-IMF Summit on "New Growth Models in a Changing Global Landscape" in Jakarta on Tuesday. (bbn)