The rupiah exchange rate at the Jakarta Interbank Spot Dollar Rate this morning fell by 8.0bps to trade for Rp13,332 per US dollar. The rupiah is corrected along with most Asian currencies.
“Rupiah weakens along with Asian currencies depreciation against the US dollar,” Samuel Sekuritas economist Rangga Cipta said in Jakarta, May 18.
However, Rangga said the rupiah correction is relatively limited as the Indonesian state bonds (SUN) yields improve amid prospects of inflation ahead of the Ramadan, raising expectations that of a possible credit ratings upgrade by Standard & Poor’s (S&P).
“Increasing optimism in the bond market and expectation of commodity price improvement can secure the rupiah from plunging too deep,” he said.
Binaartha Sekuritas analyst Reza Priyambada said the rupiah and other Asian currencies weaken because of an increasing interest among market players to invest in safe havens.
Reza hopes that Indonesia’s well-guarded economic fundamentals and the government’s infrastructure projects will be responded well by the market, allowing the rupiah to rebound.