The Indonesian rupiah weakened against the US dollar in the Jakarta interbank market on Tuesday over concerns of an imminent economic recession.
The rupiah tumbled 32 points, or 0.22 percent, to close at Rp14,680 per dollar compared to Rp14,648 per dollar earlier.
Despite positive sentiment in the regional market on Tuesday, the rupiah still came under pressure, chief of research and education at Monex Investindo Futures, Ariston Tjendra, said.
"Potential recession in Indonesia may pose an obstacle to the rupiah's strengthening," he remarked.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, has predicted that the national economy will grow negatively until the end of 2020 after contracting 5.32 percent in the second quarter.
The Indonesian economy is expected to contract 1 percent and 1.38 percent, respectively, in the third and fourth quarters of this year.
Ariston said yields on 10-year US bonds strengthened and gold prices also saw a correction. This indicated a shift from safe assets to risky assets and served as a positive catalyst for the exchange rate.
The rupiah strengthened to Rp14,580 per dollar in opening trade on Tuesday. Throughout the day, it hovered in a range of Rp14,580 to Rp14,714 per dollar.
According to the Bank Indonesia mid-rate on Tuesday, the rupiah strengthened to Rp14,728 per dollar compared to the previous close of Rp14,750 per dollar. (INE)
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