Both the Indonesian rupiah exchange rate and stocks continued to fall on Tuesday (06/01) as global conditions remained unconducive. Indices on Wall Street had declined sharply yesterday as the global oil prices fell below USD $50 per barrel fueling concerns about a weaker global economy. Similarly, most Asian stock indices declined as Japan's yen appreciated and energy stocks were sold by investors. Indonesia’s benchmark Jakarta Composite Index fell 0.98 percent to 5,169.06 points.
Foreign investors sold IDR 440 billion (USD $34 million) more Indonesian stocks than they bought on today’s trading day, implying that the total net sell in the first three trading days of 2015 rose to IDR 589 billion.
Meanwhile, the Indonesian rupiah exchange rate depreciated 0.26 percent to IDR 12,647 per US dollar according to the Bloomberg Dollar Index, its weakest level in three weeks. As global crude oil prices fell below USD $50 per barrel (for the first time since 2009) - giving rise to concerns that other commodity prices will also remain sluggish - market participants preferred to purchase safe havens, such as the US dollar. Yesterday, the rupiah had depreciated sharply on concerns about Greece exiting the euro and weak economic data of Indonesia. Lastly, the US dollar has been bullish in recent months as the US economy is showing structural recovery meaning that it will not be long before the Federal Reserve raises the US interest rate environment.
The Finance Ministry of Indonesia announced to have sold IDR 12 trillion (approximately USD $948.24 million) worth of bonds in the first bond auction of the year on Tuesday (6 January 2014), in line with the ministry’s auction target. Total incoming bids were IDR 22.875 trillion. The highest bid-to-cover ratio was 6.63 for the 3-month T-bills.
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.55 percent to IDR 12,658 per US dollar on Tuesday (06/01).| Source: Bank Indonesia