The rupiah fall in value was caused by higher demand for dollar to service foreign debts maturing in June-July, Ryan Kiryanto, an economist from the state lender BNI said here on Wednesday.
Ryan said the private sector should buy dollar by installments that they should not be under pressure and have to buy large amount of the currency when time for debt repayments is due.
Strong demand pushes up the price of dollar as most debtors from the private sectors have to buy much dollar at once, he said.
"This triggers a surge in the price of dollar at the expense of rupiah," he added.
The dollar rise is also caused by large import of processed food products ahead of the Islamic fasting month and Idul Fitri.
Demand for fuel also increased ahead of the Islamic holy days, he said.
He said growing imports of food products need serious addressing by the government to prevent to an increase in inflation.
He said the rupiah weakening is temporary, adding it is expected to regain much of its losses after the Julys presidential election and Idul Fitri.(*)