World Bank Projection Puts Rupiah Under Pressure

Jakarta (Antara) - A cut in World Bank's prediction for the global economic growth has put rupiah under pressure despite positive domestic sentiment with the rise in Bank Indonesia benchmark interest rate (BI rate). Rupiah traded at 9,890, losing 24 points against the US dollar in Thursday's close. "The rise in BI rate has not been responded positively by the market players with strong negative external sentiment," money market observer Ruly Nova from Bank Himpunan Saudara, said. The rise in BI rate, however, is expected to help lift rupiah from under the US dollar pressure later, Ruly said. He said demand for dollar is still high to repay foreign debts by the private sector in July-August. "Dollar stocks are shrinking while requirement remains strong, resulting in higher value of the US currency," he said. Economist Lana Soelistianingsih said the World Bank has revised down its global economic growth prediction after two emerging markets China and Brazil showed a slowdown. "Emerging economies, which have been expected to be the driving motors for the global economy have also shown signs of being running out of steam," Lana said. (*)