26 February 2020 (closed)
USD/IDR (14,234) +216.00 +1.54%
EUR/IDR (15,641) +350.19 +2.29%
Jakarta Composite Index (5,688.92) -98.22 -1.70%
The benchmark stock index of Indonesia (Jakarta Composite Index) edged higher on Monday (23/02) to set another all-time record high supported by foreign investors’ net buying (IDR 708.2 billion), optimism that Greece will not default on its debt or exit from the Eurozone, and on gaining Southeast Asian stock markets (while markets in China were still closed due to Chinese New Year). Meanwhile, the Indonesian rupiah exchange rate depreciated 0.09 percent to IDR 12,836 per US dollar according to the Bloomberg Dollar Index.
The Jakarta Composite Index (abbreviated JCI or IHSG) climbed 0.06 percent to 5,403.28 points on Monday (23/02).
Jakarta Composite Index:
Concern about a Greek default or exit (‘Grexit’) from the Eurozone eased as Greece and its creditors struck a deal on Friday (20/02) - after two previous attempts had failed - extending the country’s bailout funding by four months. Greece is now required to compile a list of reforms acceptable to its creditors. Although the country’s creditors can still reject the reform list, the Greek government has announced to honor its commitment to the creditors. Without the extension of the bailout package, Greece may have had to face a run on the country’s banks and would have had difficulty paying its bills.
A side-effect of reduced concern about the Greek bailout case is investors’ diminished appetite for safe havens giving room for capital inflows into emerging markets such as Indonesia. However, it should be noted that Greece’s debt problem is far from over.
After concerns about Greece eased, the spotlight may now turn back on the US Federal Reserve’s looming interest rate hike later this year. On Tuesday (24/02) and Wednesday (25/02), Fed Chairman Janet Yellen will take questions from the Senate Banking Committee on the US central bank’s interest rate stance. Based on Federal Reserve meetings in December 2014 and January 2015, the institutions signaled to be ‘patient’ before raising its interest rate environment. It has been speculated that being ‘patient’ means that the US central bank will not make a move for at least the next two subsequent meetings.
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.28 percent to IDR 12,813 per US dollar on Monday (23/02).
Indonesian Rupiah versus US Dollar:| Source: Bank Indonesia