Rupiahs positive movement was following the Feds policy to maintain its benchmark interest rate, Binaartha Sekuritas analyst, Reza Priyambada, said (9/22/2017), Friday in Jakarta.

However, the strengthening of the rupiah is relatively limited following the Feds hawkish statement of interest rate increase at the end of this year, Priyambada said.

In addition, the Fed will also conduct bond reduction program, causing the US dollars supply in the market to be reduced, he added.

He expects that Indonesia, which has investment grade ratings from three international rating agencies, namely Moodys, Fitchs and Standard and Poors (S & P), can maintain the performance of domestic bonds.

It is expected that the investment grade rating sentiment can maintain investors optimism towards Indonesia so that the rupiah rate may continue appreciation, he said.

Lana Soelistianingsih, economist from Samuel Aset Manajemen, added that the results of the Fed meeting on September 20, decided the Fed Fund Rate (FFR) remained at 1.25-1.5 percent but signaling would soon reduce its balance position starting next October by USD4,5 billion.

In addition to reducing its balance sheet, the Fed is expected to still raise the fund rates once again in 2017. The Fed governor signals the US economy will continue to strengthen, she added.

Source : Netral English

Sept 23, 2017