It became the best performing currency in Asia, though other currencies in the region had also strengthened: 0.19 percent for the Malaysian ringgit, 0.13 percent for the Chinese yuan, 0.08 percent for the Taiwanese dollar, 0.05 percent for the Philippine peso, 0.02 percent for the Singapore dollar and 0.02 percent for the Thai baht.
Meanwhile, the rupiah strengthened along with the US dollar index, which rose to 96.84 from 96.81 on Friday.
Investment company Money Investindo analyst Faisya said the rupiah’s appreciation had been triggered by domestic factors, particularly the meeting between President Joko “Jokowi” Widodo with his main political rival, Prabowo Subianto, on Saturday.
“The political situation has calmed down and investors are now confident about [Indonesia’s] economic development,” Faisyal said as quoted by kontan.co.id, adding that the rupiah exchange rate could be maintained above 14,000 per US dollar on Monday.
A similar comment came from futures firm PT Garuda Berjangka president director Ibrahim, who also saw the positive impact of the meeting between Jokowi and Prabowo. He said that market players also welcomed Jokowi’s victory speech on Sunday evening.
“Jokowi’s speech was extraordinary because he promised to continue his infrastructure program. It could create a positive sentiment for the rupiah,” Ibrahim added as quoted by kontan.co.id.
Ibrahim also cited domestic economic data, namely the announcement of a trade surplus of US$200 million, which also contributed to the rupiah’s strengthening.
He added that external positive sentiments, namely the speech of United States Federal Reserve chair Jeromy Powell who said he was open to the possibility of lowering the Fed’s key rate, also contributed to the rupiah’s appreciation. (bbn)