Rupiah strengthens following release of low inflation data

Rupiah strengthens following release of low inflation data

Indonesian rupiah and US dollar banknotes (ANTARA FOTO/Rosa Panggabean)

The release of low inflation data suggests optimism about better economic growth in the future even though the global conditions, particularly the trade war and Brexit, have shown no signs of exact settlement
Jakarta (ANTARA) - The Indonesian rupiah strengthened against the United States (US) dollar in the Jakarta interbank market at the weekend following the announcement of the country's inflation rate in October 2019. The local unit rose four points, or 0.3 percent, to Rp14,039 per US dollar against Rp14,043 earlier.

"The release of low inflation data suggests optimism about better economic growth in the future even though the global conditions, particularly the trade war and Brexit, have shown no signs of exact settlement," PT Garuda Berjangka Director Ibrahim Assuaibi said in Jakarta Friday.

The monthly inflation rate of 0.02 percent in October 2019 is lower than the expectation of analysts of 0.12 percent. The October 2019 inflation brought year-on-year inflation to 3.13 percent, falling short of analysts' expectation of 3.2 percent, and yearly core inflation to 3.2 percent, lower than the expected 3.3 percent.

The government's efforts to immediately reform all sectors particularly taxation, licensing and bureaucracy offered a positive sentiment to the rupiah, Ibrahim said.

"Besides, Bank Indonesia continues to intervene in the foreign currency market and mortgage shares or bonds in the DNDF trade has helped stabilize the rupiah at a fair level," he said.

The rupiah weakened to Rp14,060 per dollar in the opening trade Friday. Throughout the day, it stayed between Rp14.037 and Rp14,071.

According to the Bank Indonesia midrate on Friday, the rupiah weakened to Rp14,066 against the dollar compared to the previous closing of Rp14,008.  

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