Market participants are waiting for the outcome of the Federal Reserve's FOMC meeting, which will deal with the future of the quantitative easing program. The wait and see attitude of investors made the benchmark index of Indonesia (IHSG) fall 1.20 percent to 4,463.25 points. Few big cap stocks were able to rise and although some second liners were up, it was not enough to push the IHSG into the green zone. The rupiah continued to weaken and foreign investors were again mostly selling their Indonesian assets.
Ahead of the result of the FOMC meeting, market participants prefered to hold on to their US dollars and thus put pressure on the rupiah. Apparently, the positive impact of Bank Indonesia's interest rate hike last week has waned as investors are now more focused on the FOMC meeting. As the Fed is expected to reduce the stimulus program, the US dollar supply will diminish and will thus appreciate.| Source: Bank Indonesia