By 16:13pm local Jakarta time, the rupiah had appreciated 1.35 percent to IDR 11,713 per US dollar based on the Bloomberg Dollar Index. The performance of the rupiah was supported by rising Indonesian stocks. Just ahead of the end of the trading day, the benchmark stock index (Jakarta Composite Index) had climbed 1.70 percent to 4,989.03 points.

The market clearly favours reform-minded Jokowi, who is regarded ‘pro-business’. Initially, Jokowi had a large lead over controversial candidate Prabowo Subianto according to the popularity polls. However, in recent months this lead had nearly evaporated, giving rise to capital outflows as investors were concerned about a Subianto win. The market is not happy to see Subianto take office as he has been linked to human rights violations and comes from a corrupt background. Subianto also emphasises a high degree of protectionism in the natural resources sector.

Indonesians living abroad have already voted (last weekend). Although the results are obviously not released yet, media reports indicate that Jokowi is the more popular of the two.

The positive performance of Jokowi in the last debate was a relief to many investors who now seem to be positioning for a Jokowi win. This also means that a Subianto win (which is still possible as the gap between both candidates is still “too close to call”) on Wednesday will have a severe negative impact on the rupiah and Indonesian stocks.

Meanwhile, the US dollar climbed to a one-week high against the euro after the Goldman Sachs Group released its forecast for higher US interest rates in Q3-2015 (instead of Q1-2016) and traders are awaiting the release of Federal Reserve minutes on Wednesday (09/07).

Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.84 percent to IDR 11,787 per US dollar on Monday (07/07).

| Source: Bank Indonesia