Foreign investors continued to re-enter the Indonesian market. In combination with the lower yield on 10-year bonds (SUN) and the higher value of rupiah forwards, it impacted positively on the IHSG. Lastly, European stock indices were up on Monday's opening and provided support for Indonesia's index although also resulted in the creation of a new gap.

Although on the forward market Indonesia's rupiah rose against the US dollar, the central bank's mid rate in fact depreciated. While market participants expect no drastic changes to the quantitative easing program (which subsequently pressures on the US dollar) the rupiah could not continue the upward movement it started last week after the central bank of Indonesia raised its benchmark interest rate by 25 basis points to 7.25 percent. Market players seem to be concerned about the Fed's monetary normalization this week and expect it to be difficult to synchronize with the pace of the rupiah. Moreover, investors are aware that Indonesia's economic growth is still slowing down.  

| Source: Bank Indonesia

Asian stock indices, supported by Wall Street, were up on Monday (16/09). Matters that caused positive market sentiments included news that Lawrence Summers, one of the candidates for the chairmanship of the Federal Reserve, decided to withdraw from the race and thus opened up opportunities for Jenet Yellen who is considered to be more supportive of a gradual reduction of the stimulus program.

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