The rupiah exchange rate on Friday morning surged 61 points, or 0.43 percent, to Rp14,122 per US dollar than the earlier position of Rp14,183 per US dollar.
Samuel Aset Management economist Lana Soelistianingsih remarked in Jakarta on Friday that the strengthening of major Asian currencies, such as the Hong Kong dollar and Singapore dollar, against the greenback could be a positive sentiment to strengthen the rupiah today.
"However, the rupiah has strengthened in the past two days. Perhaps, today, it is a little weaker," Soelistianingsih noted.
On the domestic front, a decision was reached at the central bank BI's Board of Governors' meeting yesterday to keep the seven-day Reverse Repo Rate unchanged at six percent, as well as the lending and deposit rates.
This decision was based on the likelihood of the current account deficit widening in the second quarter of 2019, despite the BI estimating that economic growth in the second quarter of 2019 will slow due to the declining export performance.
This also takes into account the decision taken by the US central bank, the Federal Reserve (Fed), at the FOMC meeting on June18-19, 2019, to keep its Fed Fund Rate (FFR) fixed. Thus, BI has kept its interest rates fixed in line with the FFR while it continually monitors the global financial market and external stability in deliberating room for accommodative monetary policy in tune with the low inflation and the requirement to drive domestic economic growth.
However, BI has hinted that the open interest rate space was still open, and a decision would be taken after a confirmation on the Fed's interest rate falling.
Soelistianingsih has forecast that today, the rupiah can potentially weaken to lie in the range of Rp14,180 to Rp.14,200 per US dollar.
In the meantime, BI's middle exchange rate on Friday showed that the rupiah strengthened to Rp14,116 per US dollar than Rp14,236 per US dollar on the previous day.