Rupiah Weakens with Asian Currencies
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The rupiah exchange rate at the Jakarta Interbank Spot Dollar Rate this morning fell by 8.0bps to trade for Rp13,332 per US dollar. The rupiah is corrected along with most Asian currencies.
“Rupiah weakens along with Asian currencies depreciation against the US dollar,” Samuel Sekuritas economist Rangga Cipta said in Jakarta, May 18.
However, Rangga said the rupiah correction is relatively limited as the Indonesian state bonds (SUN) yields improve amid prospects of inflation ahead of the Ramadan, raising expectations that of a possible credit ratings upgrade by Standard & Poor’s (S&P).
“Increasing optimism in the bond market and expectation of commodity price improvement can secure the rupiah from plunging too deep,” he said.
Binaartha Sekuritas analyst Reza Priyambada said the rupiah and other Asian currencies weaken because of an increasing interest among market players to invest in safe havens.
Reza hopes that Indonesia’s well-guarded economic fundamentals and the government’s infrastructure projects will be responded well by the market, allowing the rupiah to rebound.
Questions & Answers
Q.What was the rupiah exchange rate against the US dollar this morning?
What was the rupiah exchange rate against the US dollar this morning?
The rupiah exchange rate was Rp13,332 per US dollar this morning. It fell by 8.0 basis points at the Jakarta Interbank Spot Dollar Rate.
Q.What is limiting the rupiah's correction despite its weakening?
What is limiting the rupiah's correction despite its weakening?
The rupiah's correction is limited by improving yields on Indonesian state bonds. This is happening amidst prospects of inflation ahead of Ramadan and expectations of a possible credit ratings upgrade.
Q.Why are market players selling off Asian currencies, including the rupiah?
Why are market players selling off Asian currencies, including the rupiah?
Market players are increasingly interested in investing in safe havens. This trend is contributing to the weakening of the rupiah and other Asian currencies.
Q.What factors might help the rupiah to rebound?
What factors might help the rupiah to rebound?
Indonesia's strong economic fundamentals and the government's infrastructure projects could be responded to well by the market. This positive market response could allow the rupiah to rebound.
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