On Wednesday, Rupiah Strengthened By 0.86 Percent To Rp14,160 Per US Dollar

Illustration. (Photo: Bank Indonesia)

JAKARTA - The rupiah exchange rate was opened stronger at the opening of trading on Wednesday, March 4. The rupiah opened up 0.86 percent to a level of Rp14,160 per US dollar.

According to VOI, at 09.07, the rupiah was still at a strengthening level, although it fell from its opening value. The rupiah was at the level of Rp14,185.

Monex Investindo Futures Head Researcher Ariston Tjenda said the surprise from the US Central Bank last night that it cut its benchmark interest rate by 50 basis points to 1-1.25 percent (unscheduled) could help restore the strengthening of the rupiah against the US dollar today.

"The interest rate cut is deeper than usual. Usually only 25 basis points." said Ariston to VOI.

He added that in general the market reaction was mixed in response to the Fed's action. This can be seen from the movement of risky assets, which are not all strengthening.

"The response from the Fed also means that the corona outbreak has a very serious negative impact on the economy. Moreover, this virus is still showing an increasing spread in several countries," he explained.

Apart from the Fed, continued Ariston, a series of stimuli had been and will be carried out by several countries, especially those affected by the corona. The Australian Central Bank has also cut its interest rate to 0.5 percent yesterday.

"The Japanese Central Bank has purchased bonds worth 500 billion yen. The Indonesian government and BI also issued a stimulus policy. The South Korean government plans a budget for the stimulus," he said.

He predicts that the rupiah will move in the range of IDR 14,100-14,200 today.