Jokowi-Backed Rupiah Gain Won't Last, Economists Say
11 July 2014 20:30 WIB
TEMPO.CO, Jakarta – The so-called Joko Widodo effect on the rupiah appreciation is not expected to last. Apart from the fact that the rupiah gain was already expected, the market is also affected by assumptions that Jokowi will be dealing with a hostile parliament, once he takes on the presidential seat.
Standard Chartered Bank economist, Erik Sugandi, said the market is worried that Jokowi's administration—which will only control 37 percent of the parliament—will bump into difficulties. Based on this worry, Erik estimated the rupiah exchange rate will fluctuate until the Election Commission (KPU) announces the final votes count.
On Thursday's money market transaction, the rupiah gained 52 points (0.45 percent) to 11,573 per US dollar, a five-day rally that began since before the presidential election.
Meanwhile, Bank Mandiri chief economist Destry Damayanti said the rupiah's current rate of around 11,500 per US dollar is at its fundamental zone. It will not move any lower unless there are fundamental reasons.
Market participants have responded positively to Jokowi-Kalla's win, based on the quick count by a majority of pollsters calling a 3-5 percent margin ahead of rival Prabowo-Hatta.
"Although they are still waiting for the official count by the Election Commission on July 22, market players are certain that it will not differ much from the quick count poll," Platon Niaga berjangka analyst Lukman Leong told Tempo yesterday.
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