Despite the release of positive macroeconomic data on Monday (03/02), Indonesia's rupiah exchange rate depreciated 0.22 percent to IDR 12,240 per US dollar based on the Bloomberg Dollar Index. China’s Manufacturing PMI fell to a six-month low of 50.5 in January and put pressure on stocks and currencies in emerging markets. Moreover, the Federal Reserve's further reduction of its quantitative easing program (to USD $65 billion per month) continues to strengthen the US dollar at the expense of emerging currencies.
Domestic factors were positive as Indonesia posted a USD $1.5 billion trade surplus in December 2013, thus positively impacting on the country's trade and current account deficits. Meanwhile, inflation eased to 8.22 percent (year on year) in January 2014 as the monthly inflation rate in the first month of the year was 1.07 percent. However, analyst of Danareksa Sekuritas Lucky Bayu Purnomo expects that the rupiah will continue to decline up to IDR 12,300 until April when the legislative election will be held.
The central bank's mid rate (the Jakarta Interbank Spot Dollar Rate or JISDOR) depreciated 0.2 percent to IDR 12,251 per US dollar on Monday (03/02).