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Rupiah Appreciates to 11,668 per Dollar on Thursday Afternoon

The rupiah interbank trade rate appreciated by 1.1 percent to 11,668 per US dollar in Jakarta on Thursday.

In addition, Bank Indonesia’s (BI) mid-rate data showed the rupiah was traded at 11,686 per dollar, a rise of 0.25 percent on the previous rate, kontan.co.id reported.

PT Bank Mandiri analyst Rully Arya Wisnubroto said the improvement of the rupiah was mostly driven by internal factors.

After the July 9 presidential election, foreign capital entering the country reached more than Rp 10 trillion (US$850 million).

“Foreign capital is expected to continue to enter the stocks and bonds markets in Indonesia. This condition will help strengthen the rupiah,” Rully said in Jakarta on Thursday.

Externally, he said positive sentiment came from China since its gross domestic product (GDP) had grown by 7.5 percent during the April-June 2014 period, 0.1 percent higher than previously expected.

Moreover, PT Monex Investindo Futures senior researcher Albertus Christian said the improvement of the rupiah was limited since there was a correction in the country’s bonds market.

He said it could be seen by the yield of 5-year government bonds, which rose to 7.86 percent, the highest level for the past five months. This had encouraged foreign investors to conduct profit taking actions.

“Such actions have slowed the strengthening of the rupiah,” Christian said.

Rully predicted the domestic currency would be traded between 11,625 and 11,750 per dollar this week while Christian projected it would move to between 11,615 and 11,725 per dollar this week.

Source : www.thejakartapost.com, Thursday, July 17 2014