Update COVID-19 in Indonesia: 365,240 confirmed infections, 12,617 deaths (19 October 2020)
19 October 2020 (closed)
USD/IDR (14,729) -12.00 -0.08%
EUR/IDR (17,333) +66.96 +0.39%
Jakarta Composite Index (5,126.33) +22.92 +0.45%
Indonesian stocks plunged considerably on Thursday (02/10). The country’s benchmark stock index (Jakarta Composite Index, abbreviated IHSG) declined 2.73 percent to 5,000.81 points, the largest drop in almost six months. This poor performance was caused by both external and internal factors. Externally, various weak economic data from the USA and Europe as well as an appreciating yen impacted negatively on Asian stock indices. Internally, market participants responded negatively toward the inauguration of the new parliament.
Weak economic data from Europe and the US included slowing German manufacturing in September, US MBA mortgage applications, US market manufacturing PMI, US ISM manufacturing PMI and US construction spending. However, the Euro continued to depreciate as the European Central Bank (ECB) failed to provide details on the size of a plan to buy private securities, reducing expectation that it would expand the ECB’s balance sheet enough to weaken the currency. As a result, the US currency was able to appreciate.
Domestically, the market has become increasingly concerned about the large opposition in Indonesian parliament, and which is expected to block president-elect Joko Widodo’s reform programs. On Wednesday evening (01/10), a majority in parliament elected Setya Novanto (Golkar party) for the post of House speaker. This means that this key position in now under control of Widodo’s opponents. The Speaker of the House (and his deputies) can influence progress of bills through parliament before becoming law.
| Source: Bank Indonesia
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.43 percent to IDR 12,136 per US dollar on Thursday (02/10).