Rupiah gains vs. US dollar

The Indonesian currency rupiah gained 15 points against the US dollar in trade on Wednesday morning as a result of protective measure by Bank Indonesia .

The currency traded at 9,703 to the dollar strengthening from 9,718 earlier with intervention by the Indonesian central bank buying rupiah using part of its foreign exchange reserves.

The central bank succeeded in stabilizing rupiah at the expense of a cut in the country`s foreign exchange reserve, Samuel Sekuritas` analyst, Lana Soelistianingsih said here on Wednesday.

Lana, however, noted that demand for the US dollar remains high, predicting this week rupiah is still vulnerable and will likely fall with weakening fundamental support fro the foreign exchange reserves and expectation of inflation hike.

"This week rupiah will likely hover around the levels of 9,700 to 9,750 per dollar under the protection of Bank Indonesia," she said. Trust Securities` analyst Reza Priyambada said external factor was favorable for rupiah with the Fed pledging to continue with its bond buying program

"The euro exchange rate strengthened on the report and in addition, increase in German trade and Britain`s manufactured production," helped shore up euro," Reza said.