REPUBLIKA.CO.ID, JAKARTA -- The Indonesian rupiah has appreciated by 10 points to Rp13,870 from Rp13,880 per US dollar at the Jakarta Interbank Spot Dollar Rate on Wednesday. Earlier, the rupiah had slightly depreciated by five points to Rp13,885 per US dollar at the opening.

The rupiah has been moving on from the psychological level of Rp14 thousand per US dollar since last weekend. Binaartha Securities' analyst Rezasyah Priyambada noted here on Wednesday that market's interest to turn to euro than the US dollar has supported the rupiah to appreciate.

Priyambada has forecast the positive trend of the euro was influenced by the European Central Bank's plan to issue some economic stimulus following deescalating political tension in Italy, especially after Prime Minister Giuseppe Conte announced they would not leave the Euro Zone.

Also read: Rupiah falls slightly against dollar

Meanwhile, domestic sentiment had been absorbed by the market that reduced the rupiah's volatility. "However, the rupiah's appreciation is estimated to be limited," he forecast.

Priyambada added that the restricted appreciation of the rupiah might cause the market to move to other currencies that have more space to move higher.

The rupiah is forecast to move around at the support level of Rp13,882 per US dollar and resistant level at 13,865 per US dollar.

On May 30, Bank Indonesia (BI) raised the key rate by another 25 basis points to 4.75 per cent at the extraordinary meeting of the board of governors held to anticipate external risks, particularly the expected second hike in the Fed rate on June 13, 2018. In mid-May, BI had raised the key rate by 25 basis points to 4.5 per cent.

Meanwhile, the Chief of the Central Statistics Agency (BPS), Suhariyanto, on Monday said the inflation rate stood at 0.21 per cent in May as food prices did not rise significantly ahead of Eid-al-Fitr festivities.

The release of the Purchasing Manager's Index (PMI) hike added to the positive sentiment on the rupiah.

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