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Sep 5, 2011

Rupiah Weakens 35 pts

Jakarta - The rupiah against the U.S. dollar in the Jakarta interbank weaken early Tuesday by 35 points to Rp8.570 per U.S. dollar compared to the previous day Rp8.535.

Managing Research Indosurya Reza Priyambada Asset Management in Jakarta, Tuesday (6-9-2011) said, the weakening of some other Asian currencies against the U.S. dollar have a negative impact on the rupiah exchange rate

He said market players are still concerned about the financial crisis in many European countries lead the U.S. dollar strengthened against the euro and other currencies so the impact on the rupiah currency.

"The weakening of Asian currencies because of the euro also weakened against the U.S. dollar. The currency has appreciated against the U.S. dollar is still strong world currencies due to the crisis in Europe that has not been recovered, so the exchange rate affected by the negative," he said.

The weakening of European currencies makes the demand for high-yielding currencies in emerging markets declined slightly. Foreign market participants who sell its stake in the domestic stock market add to the negative sentiment rupiah traded in the spot market.

"Due to avoid the risk of European debt crisis and U.S. economic conditions, market participants tend to hold U.S. dollars," he said.

However, there are still positive sentiment from the domestic inflation rate that is the appropriate market expectations of 0.93 percent.

"The increase in inflation was due to an increase in the price of gold jewelry as well as the cost of education. Thus inflation of the calendar year January to August 2011 reached 2.69 percent. But the situation had been expected by market participants," she said.