Tuesday, 17th October 2017

Market anticipates Fed`s decision to raise interest

18th June 2017 | 9.723 Views
Jakarta (ANTARA News) - The financial market has anticipated the Federal Reserves decision to raise its benchmark rate, Indonesian Coordinating Minister for Economic Affairs Darmin Nasution said.

"The market has made adjustment (on the decision)," he stated here on Friday night.

The adjustment can be seen from the movement of the rupiahs exchange rate against the US dollar, which was not too volatile in the past couple of days, he noted.

He stated that he was not too worried about capital outflow as a result of the Feds decision as investors have high confidence in the prospects of the Indonesian economy.

"If there is outflow, then the rupiahs exchange rate would have fallen. But this did not happen. If (the rupiah) weakens, it will only fall by Rp6 to Rp7. Investors are quite confident in the Indonesian economy as (our sovereign credit) has just received investment grade," he explained.

The rupiah fell slightly by 1 point to Rp13,283 per dollar in the Jakarta inter-bank spot market on Friday evening (June 16) compared to the previous close of Rp13,282 per dollar the day before.

"Despite the weakening, the rupiah is relatively stable amidst the Feds decision to raise its benchmark rate," Binaartha Sekuritas analyst Reza Priyambada revealed.

He believed that Feds decision was one of the factors preventing the rupiah from moving towards a positive zone in the short run. (*)