The rupiah fell 29 points, or 0.19 percent, to close at Rp14,678 per dollar on Wednesday compared to the previous close of Rp14,649 per dollar.
"The market is awaiting the Jakarta governor's decision tomorrow evening as to whether he will extend the transitional period of PSBB, which will end on August 27, 2020, or change it to conditional new normal," director of PT TRFX Garuda Berjangka, Ibrahim Assuaibi, said here on Wednesday.
The decision is very important since the second quarter of 2020 only has one month left. It will also have a deciding impact on economic growth, which has currently stagnated due to declining public consumption, he noted.
The government has made every effort to boost economic growth by allocating a sizable amount of funds to the health sector for the payment of doctors' and nurses' allowances, direct cash assistance, social assistance, and monthly allowance of Rp600 thousand to workers with a monthly salary of less than Rp5 million, he said.
"These all have been done to boost the people's purchasing power so public consumption will increase, though only in September. However, if contraction happens, it (the economy) will not fall deeper," he added.
On the external front, the market gave a positive response after US and Chinese trade officials reiterated their commitment to the first phase of a trade agreement, thereby easing concerns over the diplomatic deadlock between the world's two largest economies. However, tensions continued as both sides failed to agree on other issues.
The rupiah opened higher at Rp14,585 per dollar in the morning. Throughout the day, it hovered within the range of Rp14,585 to Rp14,692 per dollar.
According to the Bank Indonesia mid rate on Wednesday, the rupiah weakened to Rp14,636 per dollar compared to Rp14,632 per dollar earlier. (INE)
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