Tuesday, 23rd September 2014

Rupiah strengthening on central bank`s protection

Senin, 6 Mei 2013 12:27 WIB | 813 Views
Jakarta (ANTARA News) - The Indonesian currency rupiah gained slightly on Monday morning against the US dollar thanks to protection by Bank Indonesia (Central Bank).

Rupiah traded at 9,725 to the dollar in inter-bank transactions strengthening from the level of 9,735 in last week`s close.

"Bank Indonesia still controls the rupiah movements to keep it in a positive area," Trust Securities` analyst Reza Priyambada said here on Monday.

Reza said the central bank was more protective amid negative sentiment after Standard & Poor`s (S&P)lowered the Indonesian debt rating to stable from positive outlook.

The International rating agency lowered the rating of Indonesian foreign debt last week on concern of stalled economic reform.

The rupiah value was also shadowed by external sentiments including from Indian central bank which cut its benchmark interest rate from 7.5 percent to 7.25 percent, Reza said.

Other Asia Pacific central banks are expected to follow the step taken by the Indian central bank, he said.

Chief researcher of Monex Investindo Ariston Tjendra said, however, the effects of the debt rating cut by S&P would not last long.

Ariston said the Indonesian economy still has good fundamentals and the central bank is expected to closely monitor the rupiah movements after the debt rating cut.

He said the International Monetary Fund (IMF) maintains its prediction that Asian economy could still grow 7.1 percent led by China, India and Indonesia.(*)