Rupiah Extends Gain In Friday's Opening Transactions

Jakarta, April 12(Antara) - The Indonesian currency rupiah gained against the US dollar in inter bank transactions on Friday morning on expectation that the country`s inflation would go down the rest of the year. "The rupiah gained more value on expectation that the country`s inflation would decline in the coming months," money market observer Ruly Nova of Bank Himpunan Saudara said here on Friday. The currency traded at the level of 9,700 to the dollar strengthening from 9,711 earlier. The expectation came after Bank Indonesia decided to maintain its benchmark interest rate (BI Rate) at 5.75 percent, Ruly said on Friday . The central bank said after the monthly meeting of its board of governor on Thursday that the decision to maintain the BI Rate was in line with the country`s inflation targets of 3.5 percent this year and 5.5 percent in 2014. However, rupiah was still shadowed by US jobless data which was declining that would strengthen the US dollar against Asian currencies including rupiah, Ruly said. "In addition, the world commodity prices tend to decline," he added. Meanwhile, Samuel Sekuritas` economist Lana Soelistianingsih said inflationary pressure in the past three months was short term phenomenon triggered by volatile food prices. "Bank Indonesia is expected to intensify monetary operation to cushion the impact of the pressure by absorbing excess liquidity," Lana said. Bank Indonesia Governor Darmin Nasution said on Thursday the increase in inflation in the past three months was not a monetary phenomenon, rather it was caused by shortage in supplies of three commodities - red onion, garlic and chili - related to import policy adopted by the government. "We believe, the inflation will still be within target this year," Darmin said, adding upsurge in foodstuff prices had pushed up the consumer price index in March, but the core inflation remained stable at 4.21 percent on-year.