Stocks & Rupiah Indonesia: Trump's Travel Ban Causes Uncertainty
Shares in Asia (as well as US stock futures) are trading lower, while the US dollar is sliding on Monday (30/01) after US President Donald Trump announced to curb immigration into the USA. This move sparked wide criticism at home and abroad, while giving rise to uncertainty about future (unpredictable) US political and economic policies. Since Friday (27/01) refugees from seven predominantly Muslim countries - Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen - are banned (for 90 days) from entering the USA.
Citizens of the seven aforementioned nations are now banned from traveling to the USA for the next 90 days. Meanwhile, refugees from Syria are banned indefinitely. Officials said this ban is a counter-terror measure, not a measure aimed at a specific religion.
One of the first major concerns was whether green card holders would be affected by this new policy. A government official, however, emphasized that those immigrants from the seven singled out countries who already have a green card would not be affected. Others fear that this is the wrong strategy in terms of the global fight against radical Islam because the policy links terrorism with Islam.
Indonesia is not among the seven countries that were singled out by Trump. However, Indonesian Foreign Affairs Minister Retno Marsudi expressed her deep regrets about the new US policy. With around 220 million Muslims, Indonesia has the world's largest Muslim community. Although the travel ban will not have any direct political or economic impact on Indonesia, it does ignite anti-USA sentiments in Southeast Asia's largest economy. Earlier, concern rose because Trump's "America First-policy" (implying protectionist measures) could damage the friendship between the USA and all other nations.
However, gaining popularity in Middle Eastern and Asian nations is most likely not placed high on Trump's agenda. Contrary to Barack Obama, who took efforts to rebuild relationships with Middle Eastern and Asian countries, Trump seems to have little interest in maintaining "American soft power" in these nations.
Indonesia's benchmark Jakarta Composite Index is rather directionless today, having risen by 0.01 percent to 5,313.38 points by 11:30 am local Jakarta time, while the Indonesian rupiah had appreciated 0.13 percent to IDR 13,342 per US dollar by the same time on Monday (30/01).
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