Jakarta (Antaranews Jatim) - The Indonesian rupiah continued to depreciate against the US dollar on Wednesday's opening at the Jakarta Interbank Spot Dollar Rate.
The rupiah weakened 65 points to Rp14,196 from Rp14,131 per US dollar on Tuesday's closing.
According to Bank Indonesia, the Indonesian central bank, the rupiah's depreciation had been observed since last April, and it had continued to hover at around Rp14 thousand per US dollar until now.
"The US dollar continues to strengthen against most global currencies ahead of The Fed's meeting due this week," Ariston Tjendra, head of Research at Monex Investindo Futures, noted here on Wednesday.
Tjendra pointed out that up to three percent of the US bond yields had continued to apply external pressure on the rupiah coupled with the sentiment arising from the trade agreement inked between the United States and China had influenced higher demand for the US dollar in the global market.
Moreover, the market's expectation to The Fed's plan to hike its rate two more times in 2018 has led to a positive sentiment for the US dollar's appreciation.
"It is also possible that the rate will be hiked three more times," Tjendra noted.
In the meantime, Bank Indonesia is planning to increase the frequency of foreign exchange swap to thrice a week in a bid to counter the rupiah's continuing depreciation by strengthening its liquidity.
The policy is expected to boost the rupiah currency against the US dollar, according to Binaartha Securities' Reza Priyambada.
Earlier, Governor of Bank Indonesia Agus Martowardojo was criticized for the rupiah's continuing depreciation during a hearing between the House of Representatives' Commission XI and the Indonesian central bank on Tuesday.
Mukhammad Misbakhun, a lawmaker of Commission XI, pointed out that Martowardojo, who retires today (May 23), will leave behind a legacy of rupiah currency at Rp14,200 per US dollar.
Misbakhun said that on the day Martowardojo was elected as Bank Indonesia's governor in May 2013, the rupiah was at Rp9,700 per US dollar, and it continued to hike in the last five years of his term.
Hence, Misbakhun stated that the legacy left behind by Martowrdojo for his successor to come up with a real solution to strengthen the rupiah was a challenging task.(*)
