JAKARTA (Yosefardi) – The rupiah weakened further to Rp12,731 on Wednesday (Jan 7) as investors are worrying about the hike of US Fed rate this year.
In domestic front, investors also concern over the country’s economic outlook which tends to slow in the fourth quarter of 2014.
Indonesia recorded trade deficit of US$420 million in November 2014 along with 14.57% drop in export. The deficit figure surpasses the expectations of many. The government’s policy to cut fuel subsidy has not support the trade balance yet.
Finance Minister Bambang Brodjonegoro however said he is still optimistic the rupiah would recover to the level of Rp12,200 set on the budget assumption for this year.
Bambang noted that the current rupiah depreciation over the dollar is mainly affected by external factor such as tumbling crude prices and growing turmoil in Greece.
Bank Indonesia (BI), the central bank, also views that the rupiah’s current level remain reflecting its fundamental. But BI will stay in market to control the rupiah’s volatility.