"The projection of low inflation rate, which is still relevant to the governments target, is one of the factors strengthening the rupiah against the dollar," money market observer Rully Nova of Bank Himpunan Saudara stated.
The Central Statistics Agency (BPS) is expected to release the inflation data for February 2016 in early March.
Nova further noted that the series of economic policy packages, which have been issued since September 2011, will soon have an impact on the economy. Under such circumstances, market players have anticipated the condition by holding on to rupiah-denominated assets.
On the external side, Nova said a fluctuation in the global crude prices, which tend to be stable, has added to the positive sentiment towards the currencies, including the rupiah.
"The rising oil prices will affect the state fiscal and will support the prospect of the Indonesian economy. Hopefully, the upward trend in the global crude prices will last for quite a long time," he noted.
Nova added that the negative interest policy adopted by several developed countries had also influenced the investors. Indonesia, which still offers a positive interest rate, will draw the attention of investors.(*)
Editor: Heru Purwanto
Copyright © ANTARA 2016
