JAKARTA. The rupiah exchange rate traded among banks in Jakarta on Tuesday afternoon weakened by nine points to Rp 12,722 per US dollar from Rp 12,713.

Bank Himpunan Saudara financial market analyst Rully Nova said in Jakarta on Tuesday that external sentiments were the main factor of the weakening of rupiah against the US dollar, along with the US economic data that tended to be positive so that financial market players expected a Fed rate increase that was faster than predicted.

“The market players previously predicted that the Fed rate will increase in the mid of 2015; however, it can happen faster if US economic improvements were sustainable,” said Rully.

“If the interest rate increases, this will open an opportunity for a bigger yield in the US,” the analyst added.

Nevertheless, Rully said, Bank Indonesia (BI) still safeguarded the rupiah to fluctuate within a range that was not too wide, considering that the amount of Indonesia’s foreign currency reserve was still quite large and could be used for monetary control. The country’s foreign currency reserve was recorded to reach US$111.14 billion at the end of November.

State lender PT Bank Mandiri Tbk financial market analyst, Reny Eka Putri, said pressures against the rupiah had tended to be held back on Tuesday afternoon following BI’s interventions in the domestic financial market.

“Without such interventions, the rupiah could weaken to Rp 13,000 per dollar and this could disrupt the psychology of the market,” said Reny.

The analyst further said the rupiah weakening was in line with other currencies, and this was primarily caused by sentiments from the US related to expectations on the Fed rate increase.

BI’s median rate recorded that rupiah weakened to Rp 12,900 per dollar on Tuesday from Rp 12,599 in the previous day. (ebf)

Editor: Yudho Winarto