Rupiah closes lower in value on uncertainty in trade war

Rupiah closes lower in value on uncertainty in trade war

Rupiah and US dollars. (ANTARA /Sigid Kurniawan)

Jakarta (ANTARA News) - The Indonesian currency rupiah lost some of its value in the closing session of inter-bank transactions on Tuesday on uncertainty in trade war.

The currency traded at the level of 14,624 per U.S. dollar losing 75 points from earlier level of 14,549.

Analyst of Valbury Asia Futures, Lukman Leong said external sentiment was the main cause of the rupiah fall in value.

"The position of the currencies of developing economies including rupiah are still influenced by uncertainty in trade war between the United States and China. The condition prompted the market players to put their fund in more liquid assets, in this case the U.S. dollar," Lukman said.

He said the currencies of developing economies become less attractive as the investors still consider possible trade ware to break out again.

"The U.S. economic data, which showed a slow down and the dovish signals from the Fed on interest rate, would put pressure on the US dollar as the currency has been seen as a liquid asset," he said.

In addition the negative sentiment from the current account deficit in the country still put pressure on rupiah, he said.

Economist of Samuel Sekuritas, Ahmad Mikail , said the US dollar strengthened over the majority currencies in the world on uncertainty shadowing the economic relations between the European Union and Britain after the Brexit.

The US dollar regained its position as the safe haven amid the uncertainty, Mikail added.

Meanwhile, Bank Indonesia middle exchange rate on Tuesday showed that rupiah weakened to 14,613 per dollar from earlier level of 14,517 per dollar.

Reporting by Zubi Mahrofi
Editing by Suharto