"The rupiah is weakening as the market players are expecting monetary easing at FOMC."Jakarta (ANTARA News) - The Indonesian currency rupiah lost more value against the US dollar this afternoon on market players expecting the Fed to announce quantitative easing.
The rupiah weakened 15 more points to the level of 9,575 per dollar from 9,560 in morning trade.
"The rupiah is weakening as the market players are expecting monetary easing at the Federal Open Market Committee (FOMC) on Thursday," says Indosurya Asset Management`s managing researcher Reza Priyambada.
Reza said rupiah strengthening was blocked on the absence of market optimism with the Indonesian exports still weak.
In addition, Bank Indonesia is not yet ready to tight its monetary policy despite an increase in the country`s inflation, he added.
"The Indonesian central bank is not expected to raise its key rate of 5.75 percent on assumption that the stability is gaining in Europe and the country`s economy remains strong," he said.
The rupiah weakening is not in line with the global sentiment, which is quite positive with the euro strengthening, especially after the announcement by ECB Governor Mario Draghi about the program to purchase unlimited amount of bonds, he said.
However, the rupiah weakening could result in shrinking imports and a cut in the country`s trade deficit, he said.
Meanwhile, Bank Indonesia middle exchange rate on Monday showed the rupiah gained to 9,583 from 9,593 per dollar.
(Uu.AS/B003/H-ASG/B003)
Editor: Priyambodo RH
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