"The rupiahs exchange rate appreciated on the back of domestic sentiment, on Wednesday, after it was corrected on Tuesday," Rully Nova, a money market observer of Bank Himpunan Saudara noted here on Wednesday.
The Indonesian currency continues to show a positive trend, along with the countrys positive economic fundamentals this year, he stated.
"One of the effects of the positive economic fundamentals can be seen from the expectation of stable inflation and the projected decline in trade deficit," he added.
Meanwhile, the US economy that had yet to fully support the Federal Reserves plan to continue tapering its financial stimulus had put pressure on the dollar, he claimed.
"It is expected that the US will not be too aggressive in tapering the financial stimulus. This is one of the reasons why the dollar will come under pressure," he emphasized.
Although the US will continue to taper the financial stimulus, market players had anticipated the move, and thus, the US dollar was not strong enough to appreciate against other major currencies, he explained.
According to the mid rate of Bank Indonesia, the central bank, the rupiah weakened to Rp11,850 per dollar on Wednesday as compared to Rp11,826 per dollar recorded on Tuesday.(*)
Editor: Heru Purwanto
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