Rupiah traded at 9,770 to the dollar in inter-bank transactions gaining from a position of 9,779 earlier.
Rupiah strengthened as investment market in Indonesia is still considered profitable, Trust Securities` chief researcher Reza Priyambada said here on Monday.
Inflows of foreign funds into the country contributed to propping up rupiah as the foreign fund inflows boosted confidence in the country`s economy , Reza said.
External factors contributing the rupiah rise include an increase in the value of New Zealand dollar to follow plan by China to raise interest rate and housing price.
The Chinese plan resulted in yuan appreciation, he added.
However, there are a number of factors that could block rupiah from rising such as the position taken by investors ahead of the government plan to raise the prices of subsidized oil fuels next week.
"Rupiah would be hit by negative sentiments , but intervention by Bank Indonesia would still be effective to counter balance the sentiment," kata Reza.
Milenium Danatama Sekuritas` analyst Abidin said rupiah is expected to be back on the increase in value with the plan to raise the oil fuel prices next week
"In addition, the financial market in developing countries including Indonesia still have the potential to stay in the positive area," Abidin said.(*)
Editor: Heru Purwanto
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