Rupiah Weakens To Rp13,465 On Monday Morning

Jakarta (Antara Bali) -  The rupiah's exchange rate in interbank trade in Jakarta, early Monday, weakened by 74 basis points to Rp13,465 per US dollar, compared to the earlier value of Rp13,391 per dollar.

"Great Britain's impulse to exit the European Union (known as Brexit) continues to push the sales of risky assets, elevating the demand for 'safe haven' assets, such as the US dollar," Samuel Security Economist Rangga Cipta stated in Jakarta, Monday.

The impact of Brexit was also apparent by the decrease in commodity prices, which raises the likelihood of commodity currencies, such as the rupiah, to experience pressure against the US dollar, he pointed out.

With that being said, the focus of market players has begun shifting to tax amnesty as well as the Revised State Budget 2016, which are hoped to bring about positive improvements in the nation's financial market, he affirmed.

"The positive sentiment of the agreement brings an opportunity for the immediate return of the risk appetite towards rupiah-denominated assets, post the Brexit shock," he explained.

PT Platon Niaga Berjangka Analyst Lukman Leong stated that Brexit had brought uncertainty to the global financial market, which included Indonesia. This especially holds true, taking in account the ambivalence of the Federal fund rate.

Despite this, Leong believes the negative impact of Brexit will not be as damaging for Indonesia, considering the steady economic fundamentals that open the opportunity for the rupiah to strengthen.  
"Market players will adjust their positions according to the domestic economic fundamentals," he added. (WDY)