Based on the Bloomberg Dollar Index, the Indonesia rupiah exchange rate had depreciated 0.18 percent to IDR 12,113 per US dollar at 14:45 local Jakarta time on Monday (20/01). The most important factor that caused this negative performance was China's slowing economic growth in quarter IV-2013. In the fourth quarter of 2013, China's GDP grew 7.7 percent, down from 7.8 percent in the previous quarter. This slowing growth indicates that China's economic 'recovery' is still fragile (China is among the five most important trade partners of Indonesia).
The central bank's Jakarta Interbank Spot Dollar Rate (JISDOR) appreciated 0.14 percent to IDR 12,110 per US dollar on Monday (20/01).| Source: Bank Indonesia
In the morning of Monday 20 January 2014, the US dollar appreciated against most Asia Pacific currencies.
Indonesia Stock Exchange
During the first trading session on Monday (20/01), Indonesia's benchmark stock index (Jakarta Composite Index or IHSG) rose 0.24 percent to 4,422.92 points. The agribusiness sectoral index led the gain as it rose 2.15 percent.
One of the big cap stocks that supported the rise during the first trading session was Perusahaan Gas Negara (+7.3 percent). The government is currently negotiating to turn Perusahaan Gas Negara into a subsidiary of Pertamina (the country's fully government-owned upstream and downstream oil and gas company). This step would give Pertamina greater control over the distribution of natural gas and is expected to reduce costs for the company. Perusahaan Gas Negara (PGN) is Indonesia's largest natural gas transportation and distribution company. The Indonesian government holds a 57 percent stake in the company. Reuters reported on 16/01: "The plan to inject Pertamina's Pertagas, with Pertamina potentially controlling the merged entity, is negative for (PGN's) minority shareholders, given the exorbitant value it places on Pertagas (price-earnings ratio of more than 25 times and price-to-book value of more than six times)." This negative assessment led to a 2.5 percent drop of PGN's shares on Thursday 16 January 2014.