Rupiah falls against dollar to 13,414 on Friday
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The rupiah fell 54 points to close at Rp13,414 per dollar in the Jakarta inter-bank spot market on Friday evening, compared to the previous close of Rp13,360 per dollar.
The dollar appreciated at the weekend, sending a signal that the Fed has indicated the possibility of raising its interest rate this year end, Ariston Tjendra, chief researcher of Monex Investindo, said here on Friday.
“The signal about a hike in the US interest rate is in line with the US optimistic economic data,” he added.
The release of data about US jobless claims at low level and the increase in home sales are among the reasons for the Fed to tighten its monetary policy, he noted.
“The majority of global currencies also tend to weaken against the US dollar,” he commented.
Lukman Leong, an analyst of PT Platon Niaga Berjangka, reminded that Bank Indonesia which remains in the foreign currency and bond market to control the fluctuation of local currency has prevented the rupiah from further weakening against the dollar.
On the other hand, the tax amnesty program has added to the rupiah enjoying a positive sentiment, he observed.
According to the BI mid-rate, the rupiah weakened to Rp13,408 per dollar, compared to Rp13,385 per dollar the day before.
Questions & Answers
Q.What was the previous closing value of the rupiah against the dollar before Friday's fall?
What was the previous closing value of the rupiah against the dollar before Friday's fall?
The rupiah had closed at Rp13,360 per dollar, according to the Jakarta inter-bank spot market data. This was the value against which Friday's fall was measured.
Q.What factors are causing the US dollar to appreciate, as noted by analysts?
What factors are causing the US dollar to appreciate, as noted by analysts?
The dollar is appreciating due to signals that the Fed might raise interest rates by year-end. This is supported by optimistic US economic data, including low jobless claims and increased home sales.
Q.How has Bank Indonesia intervened to manage the rupiah's value?
How has Bank Indonesia intervened to manage the rupiah's value?
Bank Indonesia has remained active in the foreign currency and bond market. This intervention aims to control the local currency's fluctuation and prevent further weakening of the rupiah against the dollar.
Q.What other domestic program is providing positive sentiment for the rupiah?
What other domestic program is providing positive sentiment for the rupiah?
The country's tax amnesty program is adding to the rupiah's positive sentiment. This initiative is observed to be providing some support for the local currency.