(MENAFNEditorial)
JAKARTA February 26 2015— The rupiah would still be in weakening trend against the US dollar this year amid the greenback’s strengthening following monetary easing actions in several countries.
However rupiah tended to strengthen against non- US dollar currencies.
DBS Bank economist Gundy Cahyadi said in such situation Bank Indonesia would tolerate the weakening rupiah even if the exchange rate approached IDR13000 per US dollar. BI didn’t seem to worry about depreciation on that level.
The reason is the real effective exchange rate (REER) continued to strengthen near to IDR9000 a US dollar. "BI will only be precautious when REER starts to decline" he said in Jakarta Wednesday (2/25/2015).
Meanwhile the rupiah rose 0.5% to position IDR12856 per US dollar in respond to Federal Reserve’s Chairman Janet Yellen testimony after fell into IDR12922 a day earlier according to Bloomberg Dollar Index.
Shortly after Yellen's speech before the Senate the US dollar weakened against most currencies around the world.
Gundy saw the rupiah was still in a high risk of volatility in line with the Fed's policy uncertainty.
Economist from University of Indonesia M. Chatib Basri argued that BI rate cut deepened the rupiah depreciation despite the external factors effect because the decline in interest rate would reduce yields in the financial markets as investors withdrawn their funds. Read more...
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