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Rupiah hit by the strengthening of US Dollar



JAKARTA (TheInsiderStories) – Senior deputy Governor of Bank Indonesia Mirza Adityaswara sees the weakening of Rupiah is un-make sense and without looking the fundamental of the economy. Rupiah had fallen in the morning and touched Rp13.700 against US dollar–its weakest position since Jan.29–before rebound to around Rp13,400 in the first session of trading on Friday.

“If the market has gone up a lot if there is negatif analysis, they tried to grab it. I know the behavior of such a market,” He said at the Bank Indonesia.

The weakening of the rupiah become the largest in Asia. The strengthening of the US dollar against the Korean won by 1.3%, 0.4% against the Philippine peso, the Thai baht 0.04%.

In contrast, the US dollar against the Singapore dollar weakened 0.21%. The US dollar also fell 0.4% against the Japanese yen, although the yen remained at its weakest point seputaran ¥ 106 per US dollar.

Daewoo Securities Indonesia sees the weakening rupiah was driven by Donald Trump winning as US president. The first reason, Trump plans to increase government spending and the US could push inflation higher. Furthermore, there will be a tug of war between prospects for economic growth in the US as a result of spending more intense, with the increase in the Fed’s interest that makes dollars more expensive.

“The question now is whether the president-elect Trump will be able to release greater spending with the potential state revenue less, given that he plans to cut taxes,” Daewoo.

Meanwhile, in the stock market, foreign selling continues with worth Rp 575.4 billion. Consequently, the Composite Stock Price Index (JCI) dropped 128 points, or 2.3 percent, to 5321.74 compared to yesterday.

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Source: The Insiderstories
Rupiah hit by the strengthening of US Dollar

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