"The US dollar strengthened against almost all of the world`s strong currencies, driven by the return of uncertainty in the European financial markets," Samuel Securities economist Ahmad Mikail stated here on Tuesday.
He noted that uncertainty in Europe was driven by the issue of an increase in the Italian state budget deficit and the return of the process of Britain`s exit from the European Union.
In addition, he remarked that appreciation of the US dollar was triggered by the prospects of the U.S. Federal Reserve hiking its Federal Funds Rate.
"The external sentiment has put pressure on the rupiah against the US dollar," he stated.
He added that ahead of Bank Indonesia`s (BI`s) Board of Governors` Meeting on Tuesday, it is expected to maintain the BI seven-day reverse repo rate or its benchmark interest rate at 5.75 percent.
CSA Research Institute senior analyst Reza Priyambada expects market participants to respond positively to BI`s policy that is expected to maintain the interest rates.
"Interest rates are maintained, and it is expected to lend a positive sentiment to the rupiah`s movement," he added.
Reporting by Zubi Mahrofi
Editing by Eliswan, Sri Haryati
Reporter: antara
Editor: Heru Purwanto
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