The Indonesian rupiah strengthened against the US dollar in the Jakarta interbank market on Monday morning following the Fed's announcement to slash its interest rate.
The rupiah gained eight points, or 0.05 percent, to trade at Rp14,770 per US dollar at 9:41 a.m. local time on Monday as compared to Rp14,778 per US dollar earlier.
Despite the Indonesian currency strengthening against the US dollar, the rupiah remains vulnerable to depreciation, Monex Investindo Futures Chief Researcher Ariston Tjendra stated in Jakarta on Monday.
"The rupiah is still prone to correction as the other instruments continue to weaken against the US dollar. Some of the Asian share indexes are also susceptible to lying in the negative territory," he stated.
Tjendra remarked that the Fed's decision to slash its interest rate to near-zero percent, coupled with other additional monetary stimuli has not had a positive impact on the money market, particularly risk assets.
"It is likely that the market is still focusing on the coronavirus global pandemic," he stated.
Early this week, the Fed had lowered its interest rate by 100 basis points to 0.25 percent and launched quantitative easing of US$700 billion that is projected to spur the current weak economy.
Tjendra has forecast the rupiah to lie in the range of Rp14,450 to Rp14,560 per US dollar on Monday.
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Editor : Mahdani
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