The IHSG was also slightly influenced by falling stock indices in China (particularly property and commodity stocks) but not enough to drag Indonesia's index down.

The Indonesian rupiah continues to weaken slightly as the market seems to be skeptic about Indonesia's fundamentals. Moreover, slowing economic growth in China is believed to impact on Indonesia. The market is concerned about Indonesia's higher inflation in July after subsidized prices of fuels were raised last month. Another hike in the benchmark interest rate (which was raised by 50 bps to 6.50 percent by the central bank last week) is highly unlikely.

| Source: Bank Indonesia

Asian stock indices gave a mixed response to Bernanke's speech. Many investors are still concerned about slowing global economic growth, particularly after the International Monetary Fund expressed its worries about the impact of a slow down in economic development of China.