Rupiah traded at 9,704 to the US dollar gaining slightly from the level of 9,705 earlier.
Rupiah rebound was halted by negative sentiments brought about by Cyprus` controversial policy slapping levy on bank deposits drawing protest from the European Central Bank.
The policy is feared to trigger bank rush with systemic consequence in the euro zone.
The policy is also feared to derail bailout fund of 10 billion euro for Cyprus to avoid default on condition the Cyprus government take a piece of every bank account in that country.
Cyprus is the fifth country after Greece , Ireland, Portugal and Spain seeking bailout.
"The condition could bring about negative sentiment for the currencies of developing countries including rupiah," Trust Securities` analyst Reza Priyambada said here on Tuesday .
Bank Indonesia, however, is expected to continue to provide protection for rupiah to keep it at a safe level of 9,600-9,700 per dollar, Reza said.(*)
Editor: Heru Purwanto
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