Rupiah falls in opening trade on Fed fund rate increase plan

Jakarta (ANTARA News) - The countrys currency rupiah sank in the opening trade on Thursday losing 20 points to the level of 15,160 per U.S. dollar from earlier level of 15,140.

Economist of Samuel Sekuritas Rangga Cipta said the U.S. dollar gained over major other currencies in the world after report from the meeting of The Fed last month indicating that the U.S. Central Bank would again raise its fund rate before the end of this year.

"The Fed will likely continue with its policy of raising its fund rate to keep the stability of the U.S. economy," Rangga said.

The U.S. dollar regained its position as a safe haven amid expectation of investors that the Fed would raise its fund rate.

The Fed already raise its fund rate twice earlier this year and it is expected to continue the policy next year.

"The sentiment from the United States weakened the currencies of developing economies such as yuan of China. The falling value of yuan has its negative impact on rupiah," he said.

Senior analyst of CSA Research Institute Reza Priyambada said expectation of improved state income that would reduce budget deficit to less than 2.2 percent of the Gross Domestic Products would help keep rupiah from sinking deeper.

"It is expected there would be less global pressure that domestic sentiment would prop up rupiah,"

Source: ANTARA News

Related posts