Analyst: Rupiah likely to strengthen as US dollar pressured by bond buybacks

The rupiah exchange rate against the US dollar strengthened by 30 points, or 0.17 percent, to Rp17,810 per US dollar at the opening of trading on Thursday, compared with the previous close of Rp17,840 per US dollar.

Currency analyst at Doo Financial Futures Lukman Leong assessed that the rupiah has the potential to continue strengthening amid US dollar weakness caused by bond buybacks.

“The rupiah has the potential to strengthen along with the sharp weakening of the US dollar itself after the US Treasury Department announced plans to double buyback operations to support long-term bond liquidity,” Lukman told ANTARA in Jakarta on Thursday.

The rupiah’s strengthening also came after Bank Indonesia decided to hold its benchmark rate, the BI-Rate, at 5.75 percent at the Board of Governors Meeting on Wednesday (19/8).

Bank Indonesia also maintained the Deposit Facility rate at 4.75 percent and the Lending Facility rate at 6.50 percent.

Taking these sentiments into account, Lukman projected the rupiah to move within a range of Rp17,750 to Rp17,850 per US dollar in Thursday’s trading.