"The rupiah declined marginally in the evening after it came under intense pressure in the morning," Bank Mandiris money market analyst, Rully Arya Wisnubroto, said here on Tuesday.
Despite the slight drop, the local unit is still showing a trend of appreciation against the dollar, particularly after Bank Indonesias resolve to maintain the rupiah at a level of Rp11,000 per dollar, he added.
In the long run, the implementation of the law banning the export of unprocessed minerals will have a positive impact on the rupiah, he remarked.
"It will have an adverse impact in the short and medium terms because it will reduce exports. However, in the long run, it will have a positive impact," he said.
In the short and medium terms, the rupiah will move slowly in the domestic money market as investors will adopt a wait and see approach in anticipation of the results of the legislative and presidential elections this year, he noted.
"The money market is observing issues related to the elections," he said.
External sentiments, including a crisis in Ukraine, have made investors cautious about risky currencies, he stated.
Rully predicted that the rupiah will move in a range of Rp11,500 to Rp11,850 per dollar this week.
According to Bank Indonesias mid rate on Tuesday (March 4), the rupiah weakened to Rp11,647 per dollar from Mondays close of Rp11,596 per dollar.
Reported by Zubi Mahrofi
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Editor: Suryanto
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