"Internal factors play an important role in the strengthening of the rupiah against the U. S. dollar," an analyst from PT Platon, Niaga Berjangka Lukman Leong, said here on Monday.
"The market expects the BI rate to be stable this week. Maintaining the BI rate at 7.75 percent is considered positive to sustain the domestic economy in the wake of the global slowdown," he added.
Leong further noted that the strengthening of the rupiah was also helped by government policies, including those related to the harmonization of the fuel oil subsidy price and the postponement of electricity tariff hikes, which will help restrain the rate of domestic inflation, as well.
"Inflation expectations are in the range of 8 to 9 percent this year, which is still quite high," the analyst remarked.
"The issue of the U. S. rate hike continues to overshadow the rate of the rupiah," Leong explained.
The rupiah middle-rate of exchange at Bank Indonesia was recorded at Rp12,568 on Monday, higher than its value of Rp12,640 per U. S. dollar on Friday (January 9). (*)
Editor: Heru Purwanto
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