May 15 10:11Rupiah lower vs dollar on technical rebound factor
Jakarta (ANTARA News) - The rupiah fell against the dollar in early deals as the US unit saw a technical rebound after recent falls, dealers said.
At 9:35 am, the rupiah was at 8,845/8,855 to the dollar compared to 8,730/8,735 on Friday.
"I am not certain about what triggered the rupiah`s fall. It could be a technical correction but the way it has fallen is just too fast," said a foreign exchange dealer with a state bank, adding that foreign investors may be selling down the local currency.
"Technically, I am not surprised as the dollar has been oversold. It is time to rebound," Ade Prima Ratu Bagus, a currency analyst with Bank Mandiri, was quoted by XFN-Asia as saying.
She added that at this stage she is not aware of any fundamental reasons that could have sparked the rupiah`s decline.
Another dealer with a state bank said the rupiah fall was likely triggered by a drop in its NDF (non-deliverable forwards) contract prices in Singapore.
"I think in terms of size, dollar demand remains the same but offshore dollar inflow has dropped a bit. For that reason, it looks like people were more aggressive in buying dollars," said Willing Bolung, head of trading at HSBC Indonesia.
He said there is a possibility that some foreign funds may have locked in profit in bonds after the central bank started cutting its key interest rate last week.
"It (rate cut) had been anticipated. But after it really came true, some people may have taken profit from bonds," Bolung said.
Bank Indonesia`s board of governors decided last Tuesday to cut the bank`s key policy rate, or the BI rate, by 25 basis points to 12.50 pct, marking the end of a tightening cycle.
It was the first rate cut since the introduction of the BI rate last July. (*)