The rupiah continued to weaken on Monday as it was quoted at Rp 14,362 per US dollar, or 0.1 percent lower than its position on Friday.
On the foreign exchange spot market, the rupiah stood at Rp 14,368 per US dollar at 10:35 a.m. on Friday, 0.29 percent lower than its position last week, which was Rp 14,327 per US dollar.
Like the rupiah, nearly all Asian currencies – yuan, won, baht, rupee, rupiah, Singapore dollar, Taiwan dollar, peso, ringgit and Hong Kong dollar – weakened on Friday.
Analysts see the trade war between China and the United States as responsible for the weakening trend of Asian currencies against the greenback.
“The conflict between the United States and China over trade is intensifying and the yen is gaining while the Chinese yuan and Australian dollar are retreating as a result today,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo as quoted by Reuters.
“The overall reaction by currencies has been limited, however, as there are also factors that support hopes for an eventual settlement, such as the possibility of the two countries’ presidents meeting at the G20.”
A similar comment was made by securities firm Samuel Sekuritas Indonesia analyst Ahmad Mikail, who said the bearish trend of the rupiah would continue because of negative external sentiment.
As quoted by , Ahmad said the market was still waiting to see how China would retaliate against the import tariff increase imposed by the US.
As reported previously, the Donald Trump administration increased import tariffs for products from China worth $200 billion from 10 to 25 percent.
Amid the weakening trend of the regional currencies, the US dollar was weaker than other main world currencies. The dollar index was at 97.31 from 97.33 the previous day. (bbn)