One of the internal reasons for the currency strengthening was the plan to implement volume II of the tax amnesty, proposed by Finance Minister Sri Mulyani Indrawati, Director of PT Garuda Berjangka Ibrahim Assuaibi said in Jakarta on Thursday.
However, the policy would only be effective if it was supported by various parties while ensuring that the government's target would be achieved, he believed.
"Such information repays the market's trust in the domestic economy, so, naturally, foreign capital flows return to the foreign exchange and bonds markets," he said.
From an external perspective, there are concerns at the rising tension between the US and China, as US President Donald Trump recently signed and passed two bills in favour of Hong Kong’s protesters, which could potentially complicate the progress of trade talks with Beijing.
In response to the US measure, the Chinese Foreign Ministry said it firmly opposed the law and threatened to take decisive steps.
In the morning, the rupiah opened strongly at 14,088 against the dollar. Throughout the day, the currency moved within the range of Rp14,088 and Rp14,101 against the dollar.
Meanwhile, Bank Indonesia's middle rate, on Thursday, showed that the rupiah had weakened to Rp14,099 against the dollar, compared to the previous day when it was at Rp14,096.