Positive sentiment in financial markets drives rupiah to surge

Positive sentiment in financial markets drives rupiah to surge

Bank Indonesia Governor Perry Warjiyo (center) accompanied by Senior Deputy Governor Destry Damayanti (left), and Deputy Governor Erwin Rijanto, gave a press statement regarding policy measures to maintain monetary and financial stability due to the impact of the coronavirus at the Bank Indonesia Building, Jakarta, Monday (2/ 3/2020). Antara foto / Indrianto Eko Suwarso / ama.

Jakarta (ANTARA) - The rupiah exchange rate traded among banks in Jakarta, Tuesday, 10:22 a.m. local time, strengthened by 45 points (0.32 percent) to Rp14,220 per US dollar, from Rp14,265 earlier, driven by positive sentiment in financial markets.

Head of Monex Investindo Futures Research Ariston Tjendra stated here on Tuesday that a positive sentiment arose in financial markets yesterday, spurred by expectations of global stimulus, such as the potential cut in the US Federal Reserve's benchmark interest rate this month.

The rupiah also strengthened yesterday owing to the stimulus program announced by Bank Indonesia last Monday (Mar 2).

This morning, the Japanese central bank reportedly conducted market operations by buying 500 billion yen in bonds. The Asian stock indexes also appeared positive this morning.

"This positive sentiment might be able to encourage the strengthening of the rupiah today," Tjendra noted.

Nevertheless, Tjendra pointed to market concerns over developments pertaining to the outbreak of the COVID-19 virus in Indonesia that could have a dampening effect on the rupiah.

"Volatility is still high, so a big possibility still exists of weakening depending on the situation of the spread of coronavirus," he stated.

Ariston has forecast that today's rupiah will still hover in the range of Rp14,180 to Rp14,350 per US dollar.

Meanwhile, Bank Indonesia's mid-rate on Tuesday showed the rupiah had strengthened to Rp14,222 per US dollar, from Rp14,413 on the previous day.
Related news: BI strengthens measures to stabilise rupiah

Related news: Rupiah slips over investors' preference for safe-haven assets


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