The rupiah exchange rate in Jakarta interbank transactions strengthened to Rp9,080 from the previous day`s closing at Rp9,120 per US dollar.
Treasury Telkom Sigma`s market analyst Rahadyo Anggoro said here on Wednesday, that the rupiah has strengthened again, although it still remains in a limited range after experiencing significant pressure to reach the Rp9.100 level on the previous day.
"The rupiah strengthening is expected to be temporary and in a limited range only, the movement is predicted as a result of the central bank`s intervention," he said.
Rahadyo added that any intervention from the Bank of Indonesia brought the rupiah exchange rate to a positive area and *resisted* deeper pressure against the U.S. dollar.
Besides, the global market`s sentimental condition after the Greeks received their second bailout has also become a trigger for the rupiah strengthening against the US dollar.
However, the discourse on the national fuel price hike could depress the rupiah to return it to a lower position.
"The concern of Indonesian market players about the fuel price hike could trigger a rise in the national inflation, where such conditions could affect the rupiah`s exchange rate," Rahadyo added.
Monex Investindo Futures analyst Johanes Ginting said that the strengthening of the rupiah is driven from the implementation of the liquidity operations of the European Central Bank (ECB), despite the market enthusiasm being dampened by the news that Ireland will hold a referendum on the new European fiscal agreements.
"The financial markets are at risk of re-coloring market movements todayas investors' focus is fixed on the `Longer Term Refinancing Operation` (LTRO) of the ECB, which will provide low-interest loans to help ease the funding pressures on the banking sector," he said.(*)
Editor: Heru Purwanto
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