Jakarta – The Indonesian rupiah strengthened to Rp 10,200 against the US dollar in the interbank market Friday morning, Antara state news agency reported.

The rupiah was traded at 10,260 on Friday morning, compared to 10,310 at the close of the previous trading day. The Jakarta market was closed Thursday for the public holiday.

Money market analyst Edwin Sinaga told Antara that the strengthening of the rupiah was driven by market optimism that the country's economy would perform better than its peers in the region.

Foreign investors continue to buy the local currency so they can invest in local shares or bonds, and this results in the strengthening of the rupiah, he said.

He noted that the strengthening of the rupiah was in line with the active trading at the Indonesian Stock Exchange, which was also driven by the influx of foreign capital.

"We are confident that the rupiah will continue to strengthen and get closer to the Rp 10,200 level," he said.