Meanwhile, on the foreign exchange spot market, the rupiah exchange rate stood at Rp 14,240 per US dollar at 10:37 a.m., 0.23 lower than its position on Wednesday.

The majority of currencies in Asia also weakened against the US dollar on Thursday. Meanwhile, the US dollar index stood at 96.88 from 96.77 at market close on Wednesday.

Securities firm Samuel Sekuritas Indonesia economist Ahmad Mikail estimated that the US dollar index would be in the range between 96.8 and 97 on Thursday and would help strengthen the US currency exchange rate against other currencies.

The strengthening of the US dollar was caused by uncertainly surrounding the negotiation between the United States and China that could exacerbate the trade war between the two countries, which would have serious effects on global economic growth, he said.

“The correction that occurred in the US stock market will encourage capital outflows from emerging countries and weaken the rupiah,” Ahmad said as quoted by kontan.co.id.

Meanwhile, investment service firm Garuda Berjangka Ibrahim said uncertainty over Brexit had also helped strengthen the US dollar index. 

He added that because of uncertainty, investors were reluctant to put their funds in risk instruments. “Because Britain is the fifth biggest world economy, the impact [of uncertainty] is felt by other countries, which become its trade partners,” Ibrahim added.

Ahmad estimated the rupiah exchange rate was in the range between Rp 14,250 and Rp 14,300 per US dollar on Thursday. (bbn)

Popular

Volcano erupts in North Sulawesi, hundreds evacuated

Dubai roads, airport reel from floods after record rains

Ramadan boosts consumer confidence, retail sales