REPUBLIKA.CO.ID, JAKARTA -- The rupiah traded among banks in Jakarta, Thursday (17/12), moved higher by 30 points to Rp 14 040 compared to the previous position at Rp 14 070 per US dollar.

Head of Research of NH Korindo Securities Indonesia Priyambada Reza said, the results of the meeting of Federal Open Market Committee (FOMC) which raised its interest rate has reduced uncertainty and fears of market participants, so it could give a positive sentiment for the rupiah.

"The rate of the rupiah move higher. Certainty of the Fed in raising interest rates make the dollar rate is not too volatile. The condition is also utilized by market participants to accumulate risky assets," he said.

According to him, even though the interest rate of the US central bank (Fed Funds Rate) rose, the interest rate of Bank Indonesia (BI Rate) was still quite high of 7.5 percent. The Fed interest rate was still below one percent.

Currently, he added, market sentiment was sufficient to support rupiah to continue its gains. Nevertheless, market participants were expected to remain wary when there are other negative sentiment.

Observer of money market from Bank Himpunan Saudara Rully Nova added, the US central bank has raised interest rates by 25 basis points to 0.25 to 0.50 percent from 0-0.25 percent. The certainty of the US central bank to raise its interest rate has reduced the risk in emerging markets assets.

However, he also warned that rupiah was potentially reversed into negative. In the end of the year, demand for US dollars would be high and also foreign debt payment obligation to the corporation.

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