REPUBLIKA.CO.ID, JAKARTA -- The Indonesian rupiah strengthened by 60 points at the interbank spot market in Jakarta on Tuesday to Rp13,583, up from Rp13,644 per dollar the day before.

"The rupiah exchange rate continued to strengthen since morning despite being haunted by the possibility of the Fed raising its fund rate next December," money market observer Rully Nova of Bank Himpunan Saudara said on Tuesday.

One of the factors contributing to the rupiah's strengthening was Bank Indonesia's effort to control the market.

The move is designed to ensure that the country's macro economy and financial system remain stable as the domestic economy has begun improving, he said.

"Although the Indonesian economy grew by less than five percent, it has been on the right track. Looking ahead, it will have a chance to pick up by more than five percent," he said.

He expressed the optimism that the Indonesian economy will continue to improve as the impact of the policies issued by the government will be felt next year.

"The improving fundamentals of the Indonesian economy will help hold down any external negative sentiments, particularly the Fed fund rate hike," he said.

Nova predicted that Bank Indonesia will keep its key rate unchanged at 7.5 percent until the end of 2015 to maintain incentives for investment portfolio.

"The high level of BI Rate which will serve as an incentive for capital inflows in the portfolio will remain attractive," he said.

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