Rupiah falls over rumoured Fed Fund Rate drop

Rupiah falls over rumoured Fed Fund Rate drop

Jakarta (ANTARA) - The rupiah fell against the US dollar in the Jakarta inter-bank market on Thursday evening due to a rumoured decline in the Fed Fund rate.

The local unit declined 39 points, or 0.27 percent, to close at Rp14,280 per US dollar, compared to Rp14,241 per dollar earlier.

PT Garuda Berjangka President Director Ibrahim Assuaibi said in Jakarta on Thursday that a number of US economic indicators pointed towards a slowdown.

"Hence, it is not surprising that the Fed will lower its benchmark interest rate in the near future," he said.

The first signal of the US economic slowdown was seen in the initial reading of the IBD/TIPP economic optimism index for June, which remained at 53.2, well below the previous 58.6, the highest in the past 15 years.

The second signal was the US producer inflation for May, which was recorded at 0.1 percent month-on-month (mom), slowing down from 0.2 percent (mom) in April. The third signal was the creation of new jobs in the US, which reached 7.4 million, as indicated by the Job Openings and Labor Turnover Survey (JOLTS), down from 7.5 million one month earlier.

Meanwhile, the rupiah traded at Rp14,241 per US dollar on Thursday morning. Throughout the day, the rupiah moved within the range of Rp14,241 to Rp14,280 per US dollar.

According to the Bank Indonesia mid rate, the rupiah weakened to Rp14,270 against the US dollar, compared to the previous level of Rp14,234 per US dollar.