Rupiah Gains Against US Dollar

Jakarta, Sept 7 (ANTARA) - The Indonesian currency rupiah gained against the US dollar on Friday with positive sentiment brought about by the decisions of the European parliament and central bank (ECB). The currency strengthened 27 basis points from 9,587 to 9,560 per dollar in inter-bank transactions on Friday morning. "The market was boosted by the decisions of the European parliament and the ECB. The rupiah`s strengthening followed the gain recorded by euro against the dollar," Samuel Sekuritas`s market observer Lana Soelistianingsih said. Lana said ECB decided to buy sovereign bonds in outright monetary transaction (OMT) although it is not going smoothly. "ECB has to go through the mechanism of bridging fund already available in EU such as EFSF (European Financial Stability Facility) and EMS (European Stability Mechanism)," she said. However, ECB has firmly stated it would buy bonds from secondary market and maintain the reference interest rate at 0.75 percent. Lana said the ECB`s bond purchasing plan from secondary market is expected to reduce selling pressure on government bonds. Meanwhile, report issued by the World Economic Forum (WEF) on progress made in infrastructure development in Indonesia would give positive sentiment that would strengthen the rupiah. "Infrastructure development has to be boosted if the investment sector is to be made the main growth driver instead of the household consumption," she added.