REPUBLIKA.CO.ID, JAKARTA -- The exchange rate of inter-bank trade in Jakarta on Monday afternoon fell by 126 points to Rp14,815 compared to the previous position of Rp14,689 per US dollar. FXTM Research Analyst Lukman Otunuga here Monday stated that the economic turmoil in Turkey and Argentina had weighed on the currencies of developing countries, including the rupiah.
"Even though Bank Indonesia (BI) intervened in an effort to maintain the rupiah, strong external negative sentiment hindered BI's efforts to protect the domestic currency," he said.
There were still trade tensions between the United States and China. Moreover, speculation that US interest rates were increasing has eroded appetite for currencies in developing countries.
"In the midst of the situation, it can make the rupiah depreciate further," he noted.
He added that a number of money market players are now waiting for BI's policy in the future, whether to raise interest rates again this year or other policies. "That is one of the questions of a number of market participants," he remarked.
Meanwhile, BI's middle rate today (Sept 3), recorded the rupiah weakening to Rp14,767 compared to the previous (Aug 31) at Rp14,711 per US dollar.
Previously, Chief Commissioner of the Financial Service Authority (OJK) Wimboh Santoso said the Indonesian banking industry is still in safe condition. His comment came to respond pressure on the national currency rupiah.
"The banking condition is safe. This (falling rupiah exchange rate) is temporary. This is caused by negative sentiment," Wimboh said here on Monday.
Wimboh explained the falling value of rupiah against the US dollar and declining index of the Indonesian Stock Exchange were natural. He said that Indonesia has been used to facing volatile condition.
The best strategy at present is to strengthen coordination between stakeholders, he said. "The most effective coordination is with the public to keep the public from getting worried," he said.
He said the present condition is temporary, therefore, there is no cause for much concern.