Jakarta (ANTARA News) - Indonesias rupiah exchange rate strengthened by 25 points at the interbank trade on Thursday afternoon to Rp12,700 from previously Rp12,725 against the US dollar.

"The increase in Indonesias foreign exchange reserves is one of the factors that has boosted the rupiahs exchange rate against the US dollar," money market observer from Bank Tabungan Saudara Tbk. Rully Nova, said here on Thursday.

According to Bank Indonesia data, the countrys foreign exchange reserves at the end of December 2014 rose by US$800 million to US$111.9 billion from US$111.1 billion in November 2014.

Rully said the hike of the foreign exchange reserves was driven among others by foreign portofolios placement at home which was still good.

This reflects investors positive perception towards Indonesias economic fundamentals, he said.

Rully Nova said profit-taking factor had also played a role in it after the US rose steeply against the rupiah in the past few days bringing strength for the rupiah to bounce back to the positive area.

"Some market players used their benefit by selling for dollar in the domestic market," he said.

In the global term, he said, the US central bank (the Federal Reserve) meanwhile has not yet indicated to increase its rate in a near future due to US economic data which are not quite supportive despite some improvement.

He predicted the rupiah appreciation would be short-term as it would still be overshadowed by negative sentiment from Indonesias trade account which still records a deficit.

The rupiah middle-rate of exchange at Bank Indonesia on Thursday was recorded lower at Rp12,731 than on Wednesday at Rp12,732 per US dollar.

(Reporting by Zubi Mahrofi/Uu.H-YH/KR-BSR/A014)

Editor: Priyambodo RH
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