"The market believes the Indonesian economy will have positive fundamentals in the future so the rupiah gained another ground to close at a level of Rp11,400 per dollar," money market observer Rully Nova of Bank Himpunan Saudara said here on Thursday.
The downward trend of inflation rate, coupled with Indonesias foreign exchange reserves exceeding US$100 billion and Bank Indonesias consistency in maintaining monetary stability are important factors for investors, he said.
"The good condition shores up market players confidence in higher yields in the rupiah money market," he said.
He predicted the investors higher interest in risky assets will open a room for the local unit to continue its trend of appreciation against the dollar.
"Right now the rupiahs exchange rate is relevant to the countrys economic fundamentals," he said.
He said easing Ukraine tensions which earlier made investors worry about investing in risky assets sent positive sentiment to money markets in developing nations.
According to Bank Indonesias mid rate on Thursday, March 6, the rupiah strengthened to Rp11,554 per dollar from Wednesdays close of Rp11,580 per dollar.
Reported by Zubi Mahrofi
(SYS/KR-BSR/A014)
Editor: Suryanto
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