"The decision of Bank Indonesia to maintain its benchmark interest rate (BI rate) at 7.5 percent is one of the positive sentiment as it kept short term foreign investors from withdrawing their fund from the market," financial market observer from Bank Himpunan Saudara, Rully Nova, said.
The monthly meeting of the central bank leaders on Tuesday ended by maintaining BI rate at 7.5 percent, interest rate on deposit facility at 5.5 percent and Lending Facility at the level of 8 percent.
Rully Nova said the rupiah gain could be short term as the US dollar may surge if the Fed gave a signal to raise its fund rate.
Amid the sentiment of uncertainty financial market investors tend to hold dollar to reduce investment risk, he said.
He said the surplus in the countrys foreign trade in February added to the positive sentiment to strengthen rupiah.
The country was favored with a surplus of US$740 million in its foreign trade in February or about the same as surplus in January.(*)
Editor: Heru Purwanto
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