Senior analyst of CSA Research Institute Reza Priyambada said rupiah gain continued until Friday morning on a number of positive domestic sentiments.
"However, warning from the Governor of U.S. Central bank that it might have yet to raise its fund rate and internal problem in Europe such as related to Brexit negotiations in Britain and budget problem in Italy put the euro and pound sterling under pressure. Such situation could trigger a surge in the U.S. dollar," Reza said.
He said he hoped the are more positive domestic sentiments to keep rupiah in its green territory.
Rupiah is expected to hover around 14,695 - 14,655 per dollar on the closing trading day this week, he said.
Following the announcement on Thursday of an increase in the benchmark interest rate by Bank Indonesia, BI 7-Days Reverse Repo Rate, the Indonesian currency continued its rising trend on Friday.
Bank Indonesia raised its benchmark interest rate by 25 basis points to 6 percent to keep the position of the country`s current account deficit below the maximum level of 3 percent of the GDP this year.
Although there were fears that the increase in the benchmark interest rate could force banks to adjust their lending rate the Financial Service Authority (OJK) is optimistic credit disbursements would grow 13 percent year-on-year and that the bank liquidity is good enough to prop up Rupiah.
In addition, the response was positive that the regulation on Interest Rate Swap and Overnight Index Swap, and the trade deficit of US$1.82 billion in October, 2018 would not trigger widening current account deficit to cross the level of 3 percent.
Reporting by Citro Atmoko
Editing by Andi Abdussalam
Reporter: antara
Editor: Heru Purwanto
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