Indonesia cbank: rupiah gains temporary on US debt impasse

JAKARTA, July 27 (Reuters) - Indonesia's central bank said on Wednesday a weakening U.S. dollar due to worries over debt has pushed up the country's rupiah , but sees the gains as temporary since it expects the U.S. to reach a deal soon to avoid a default.

"I view the rupiah strengthening as more because of a weakening U.S. dollar rather than inflows, which are still at a normal level. I also view that there soon will be an agreement between the U.S. government and parliament," said Bank Indonesia deputy governor Hartadi A. Sarwono, who is in charge of monetary policy.

A Republican plan to cut the U.S. deficit has faced delay and stiff opposition, piling anxiety onto investors and ordinary Americans hoping for a late compromise to avoid a crippling debt default.

The rupiah hit a seven-year high of 8,480 per dollar on Wednesday, having already gained around six percent this year on strong capital inflows into Southeast Asia's largest economy. (Reporting by Aditya Suharmoko and Adriana Nina Kusuma; Editing by Neil Chatterjee)