JAKARTA - The rupiah exchange rate at the opening of trading in Jakarta, Tuesday, weakened 18 points or 0.11 percent to Rp16,873 per US dollar from the previous Rp16,855 per US dollar.
Doo Financial Futures currency analyst Lukman Leong said the weakening of the rupiah exchange rate was influenced by the hawkish statement from Fed officials regarding interest rates.
"The rupiah is expected to weaken against the US dollar which rebounded in response to the hawkish statement of Fed officials William (Fed New York President John Williams) who hinted that the Fed did not need to rush to lower interest rates," he said, quoted by Antara, in Jakarta, Tuesday, January 13.
Furthermore, William said that current US interest rates were in line with employment and inflation conditions, so interest rate cuts did not need to be carried out as soon as possible.
On the other hand, the US dollar has the potential to strengthen as US inflation data is expected to rise, thus further weakening the rupiah exchange rate.
"Core inflation is expected to rise from 2.6 percent to 2.7 percent, while underlying inflation remains at 2.7 percent," said Lukman.
Based on these factors, the rupiah is predicted to range between IDR 16,800-IDR 16,900 per US dollar.
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