Rupiah strengthens influenced by short-term stabilisation factors

Jakarta (ANTARA) - The rupiah exchange rate closed higher on Monday’s trading by 21 points or 0.12 per cent to Rp17,168 per US dollar from the previous close at Rp17,189 per US dollar.

Research and Development Indonesia Commodity & Derivatives Exchange (ICDX) Muhammad Amru Syifa stated that the rupiah’s strengthening was influenced by short-term stabilisation factors.

“The rupiah’s strengthening to Rp17,168 occurred amid a combination of domestic and global sentiments that still tend to exert pressure, but are balanced by short-term stabilisation factors,” he told ANTARA in Jakarta on Monday.

Looking at domestic sentiment, market players are observing the outcomes of the Bank Indonesia (BI) Board of Governors’ Meeting (RDG), which is expected to remain focused on stability, with a tendency to maintain the policy interest rate and optimise interventions in the foreign exchange market.

He opined that BI’s commitment to safeguarding the exchange rate, supported by sufficiently strong foreign reserves, also helps maintain investor confidence.

In addition, he continued, profit-taking actions against the US dollar by domestic market players also provided technical strengthening impetus.

As for the external side, the pressure is said to still come from the strengthening US dollar driven by increasing demand for safe-haven assets amid geopolitical tensions.

“Besides that, expectations of Federal Reserve policies that tend to maintain high interest rates, as well as the rise in world oil prices, also become factors burdening the rupiah through increased imported inflation risks,” Amru explained.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (JISDOR) from Bank Indonesia today also moved higher to Rp17,176 per US dollar from the previous Rp17,189 per US dollar.