Rupiah strengthens against dollar after the Fed cuts interest rate

Rupiah strengthens against dollar after the Fed cuts interest rate

Illustration - Rupiah and US dollar banknotes ANTARA FOTO/Puspa Perwitasari/am.

The rupiah's appreciation this morning is the effect of the declining Fed Rate
Jakarta (ANTARA) - The rupiah strengthened against the US dollar in the Jakarta interbank market on Thursday morning after the Federal Reserve reduced its benchmark interest rate.

"The rupiah's appreciation this morning is the effect of the declining Fed Rate," market analyst Rully Arya Wisnubroto of state lender Bank Mandiri noted in Jakarta.

The Fed lowered its benchmark interest rate by 25 basis points amid the sluggish US economic growth. This is the third time for the Fed to cut its interest rate since early this year.

Related news: Rupiah strengthens against US dollar after cabinet announcement

The Federal Open Market Committee, the Fed rate-fixing body, reduced the target of federal fund interest rate to the range of 1.5 percent to 1.75 percent after it reached a conclusion that the outcomes of the two-day policy meeting mostly accorded with the market expectation.

Chief of the Fed Jerome Powell remarked that the step was taken to ensure that the US economy remained strong in the face of global developments and offer assurance to face ongoing risks, he stated.

Wisnubroto has forecast the rupiah to lie in the range of Rp13,978 to Rp14,048 per US dollar on Thursday.

The rupiah increased 19 points, or 0.13 percent, to open at Rp14,012 on Thursday morning in comparison with Rp14,031 per US dollar earlier.

According to the Bank Indonesia mid-rate on Thursday, the rupiah increased to Rp14,008 per US dollar, from Rp14,044 per US dollar earlier. Related news: Rupiah depreciates against US dollar over trade deficit

 

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