The U.S. Central Bank's stance also considers maintaining a longer-term quantitative easing policy while also supports sentiment toward those risksJakarta (ANTARA) - The rupiah's exchange rate to the US dollar traded at the Jakarta Interbank market on Tuesday, July 13, had the likelihood to strengthen, albeit being shadowed by 40 thousand new COVID-19 cases.
The rupiah currently opened three points higher, or 0.02 percent, to Rp14,490 per US dollar as compared to Rp14,493 per US dollar at the closing of the previous trade.
Money Market analyst Arison Tjendra believed that the rupiah had a stronger possibility to follow the sentiment of global financial market players.
"The global stock index as risk assets seems to rise. The market witnesses the improvement of corporates' performance in the second quarter of the year. It pushed the market out from safe US dollar assets and turned into risk assets," Tjendra remarked.
According to Tjendra, the sentiment improvement was supported by the central bank’s quantitative easing policy by the China People's Bank of China (PBoC) that reduced the Minimum Statutory Reserve Ratio by 50 basis points that increased market liquidity.
"The U.S. Central Bank's stance also considers maintaining a longer-term quantitative easing policy while also supports sentiment toward those risks," he pointed out.
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On the other hand, the new rising cases of COVID-19, especially in Indonesia, was a matter of concern for market players.
"Economic growth could be disrupted if emergency public activity restrictions (PPKM) are extended. This has the potential to withhold the strengthening of the rupiah against the US dollar," Tjendra stated.
Indonesia hit a new record of COVID-19 cases on Monday, bracing 40,427, thereby bringing the tally of confirmed positive cases to 2,567,630.
Tjendra has projected the rupiah to hover in the range of Rp14,500 to Rp14,470 per US dollar on Tuesday morning.
On Monday, the rupiah closed at Rp14,493 per US dollar, strengthening 35 points, or 0.24 percent, as compared to the closing of the previous trade at Rp14,528 per US dollar.
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Translator: Citro Atmoko, Kenzu Tandiah
Editor: Fardah Assegaf
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