Apparently positive market sentiments brought on by the macroeconomic data released on Monday (02/12) did not last long. Yesterday, Indonesia's benchmark stock index (IHSG) was lifted by the October 2013 trade surplus and limited November inflation. However, investors are now back to reality and prefer to wait for results of Bank Indonesia's Board of Governor's meeting (12/12) and the Federal Reserve's FOMC meeting (17-18/12). The former will inform about Indonesia's interest rate, the latter about the future of quantitative easing.
The Jakarta Composite Index (JCI) fell 0.77 percent to 4,288.76 points on Tuesday (03/12). Most other Asian indices were also down, probably influenced by the falling indices on Wall Street on Monday (02/12) but also by ongoing speculation that has arisen that the Federal Reserve will wind down its USD $85 billion per month bond-buying program starting from this month as US economic data are improving.
| Source: Bank Indonesia
Bank Indonesia's rupiah mid rate continued to appreciate against the US dollar as market participants were optimistic about the country's USD $42.4 million trade surplus in October 2013 and 0.12 percent inflation in November (month-to-month) although pressures on the rupiah are rising due to local companies' demand for US dollars and speculation about the looming end of the Federal Reserve's quantitative easing program. This speculation causes a rise in value of the US dollar.
• Rupiah Exchange Rate
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• Indonesia Inflation Update: Consumer Price Index Moving Sideways
• Indonesia's October 2013 Trade Surplus Provides a Glimmer of Hope