JAKARTA, NNC - Rupiah exchange rate traded interbank in Jakarta, Wednesday (5/16/2018) morning, moved down by 35 points to IDR14,065 compared to the previous position of IDR14,030 per US dollar.
Samuel Sekuritas economist Ahmad Mikail in Jakarta said Wednesday the US dollar is moving higher against a number of world currencies driven by rising US bond yields to 3.06 percent for a 10-year tenor.
"The rise in yields is driven among others by rising investor confidence that the Fed Fund Rate will rise four times this year," said Ahmad Mikail.
On the other hand, he continued, the weakening of the rupiah was also boosted by the deficit in the trade balance. Indonesia's trade balance in April 2018 suffered a deficit of USD1.63 billion along with an increase in domestic economic activity. Cumulative-wise as of January-April 2018, Indonesia's trade balance recorded a deficit of USD1.31 billion.
Meanwhile, Binaartha Sekuritas analyst Reza Priyambada said the movement of the rupiah was still influenced by external sentiment, one of which is the prospect of Fed rate hikes.
"The lack of positive domestic sentiment is also a factor that keeps the rupiah from appreciating," Reza said, as quoted by Antara.
He added that in addition to the factor of increasing US bond yields, the anticipation by money market participants on data of US consumption rate which are expected to rise also has impact on the re-appreciation of US dollar.