Rupiah traded at Rp9,665 to the US dollar, strengthening from its initial value of Rp9,790.
"The Indonesian currency became strong because of the steps taken by Bank Indonesia (BI) to control the financial market," said Reza Priyambada, an analyst at Trust Securities, on Monday.
He said the BI will ensure that the exchange rate is at the right value. It is about controlling the market, not financial regulations.
"Although the BI has not provided details of the steps, it will control the market and strengthen the Indonesian currency soon," he said.
He added that currency movements are also a result of South Korea's rising interest rates at 2.75 percent.
He said the weakening sentiment of industrial production of some European countries also contributed to the strengthening of the Indonesian currency.
A money market analyst at Samuel Securities, Lana Soelistianingsih, added that the Indonesian currency will become stronger in light of an auction of government bonds on Tuesday, January 15.
She said the Ministry of Finance will auction the treasury prime letter (SBN) on Tuesday, January 15, with a target of Rp7 billion for the two new series of Treasury Notes (SPN), and three series of FR (reopening).
"The prime auction may not attract foreign funds because it is risky, since the Indonesian currency is becoming stronger," she said.(*)
Editor: Heru Purwanto
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