Indonesia berencana untuk memotong pajak yang dikenakan pada para eksportir lokal dalam rangka mendongkrak jumlah cadangan devisa, sambil mendukung rupiah, sebagai bagian dari paket kebijakan yang kedua. Rupiah Indonesia telah melemah 18,1% sejak awal 2015 karena ancaman kenaikan suku bunga AS, rendahnya harga-harga komoditi, dan devaluasi yuan Republik Rakyat Tiongkok (RRT). Pemerintah kini berencana untuk memotong pajak penghasilan atas bunga yang didapat para eksportir karena menabung pendapatan usaha ekspor mereka di bank-bank lokal. Saat ini, pajak penghasilan terhadap bunga bank (dari rekening-rekening tabungan) mencapai 20%.

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Setelah dibuka pada hari Senin (28/09), saham Indonesia jatuh dengan cepat di tengah pasar-pasar Asia yang performanya mixed. Faktor utama yang menyebabkan beberapa pasar Asia jatuh adalah menurunnya keuntungan industri di Cina (memicu kekuatiran mengenai semakin melambatnya negara dengan ekonomi terbesar kedua di dunia). Keuntungan industri Cina jatuh 8,8% di bulan Agustus, memburuk dari penurunan 2,9% di bulan Juli. Pada pukul 09:50 WIB, Indeks Harga Saham Gabungan (IHSG) turun 1,41% menjadi 4.150,27 poin.

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The central bank of Indonesia (Bank Indonesia) is set to announce the second installment of a policy package that aims at raising onshore US dollar supplies (and liquidity). As the rupiah has been the second worst-performing Asian emerging market currency (after Malaysia’s ringgit), having depreciated 18.1 percent against the US dollar so far in 2015, Indonesian policymakers are anxious to prop up the ailing currency in order to safeguard the country’s financial stability. Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) stood at IDR 14,690 per US dollar on Friday (25/09), a 17-year low.

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Stock markets in Asia were mixed on Friday (25/09) after Federal Reserve Chairwoman Janet Yellen said in a speech at the University of Massachusetts that the US central bank is still on track to raise interest rates before the year-end (provided no economic shocks take place as the move is data-dependent). After this looming hike, Yellen suggests to gradually tighten US monetary policy thereafter.

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In line with other Asian emerging markets and currencies, Indonesian stocks and the rupiah are weakening on Friday (25/09) after Federal Reserve Chairwoman Janet Yellen said during her speech at the University of Massachusetts that US interest rates are likely to be raised before the year-end, provided no economic shocks occur. Yellen stated that most FOMC participants agree on a Fed Fund Rate hike later this year, followed by gradual further monetary tightening thereafter.

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Global markets declined for a fifth straight day on Thursday (24/09) on persistent negative sentiments related to sluggish global economic growth, the Volkswagen emission scandal and the continuation of uncertainty about the timing of higher US interest rates after the Federal Reserve kept rates unchanged at its September policy meeting. Japan’s Nikkei 225 Index fell 2.76 percent today, while European and US stocks are deep in the red. Indonesian markets were closed due to Idul Adha celebrations (the Muslim day of sacrifice) and will therefore respond to these developments on Friday (25/09).

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Apart from external factors (China’s weak manufacturing activity and persistent uncertainty about the timing of higher US interest rates) that plague Indonesian assets today, there are also domestic factors that push Indonesian stocks and the rupiah into the red. These domestic factors include Indonesia’s downgraded economic growth forecasts and the central bank’s downgraded rupiah outlook. Meanwhile, Indonesia’s foreign exchange reserves - used to defend the rupiah - have declined further.

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In line with other Asian markets, Indonesian stocks and the rupiah are weakening heavily on Wednesday (23/09). Based on the Bloomberg Dollar Index, Indonesia’s rupiah had depreciated 0.71 percent to IDR 14,655 per US dollar by 11:08 am local Jakarta time, while the benchmark Jakarta Composite Index had fallen 1.56 percent to 4,276.43 points by the same time, with the financial sector in particular taking a hit. There are several causes that explain this weak performance today.

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Today (22/09), the Indonesian rupiah extended its weak performance and has passed beyond the level of IDR 14,500 per US dollar. Most Asian currencies continue to fall against the greenback as uncertainty about the timing of higher US interest rates persists. Although the Federal Reserve decided to postpone a Fed Fund Rate hike at its September policy meeting, markets are still preparing for a hike before the year-end as many Federal Reserve objectives had been met.

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Bank sentral Indonesia (Bank Indonesia) memperkirakan bahwa inflasi akan menurun di bawah 7% pada basis year-on-year (y/y) di bulan September 2015 akibat harga bahan-bahan pangan yang rendah dan menurunnya harga-harga yang ditetapkan (termasuk bahan bakar dan listrik) setelah periode Ramadan dan Idul Fitri. Gubernur Bank Indonesia Agus Martowardojo mengatakan bank sentral memprediksi inflasi mencapai sekitar 6,95% (y/y) di bulan September.

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Investors all around the world are in anticipation of the Federal Reserve's decision to scale back the monthly USD $85 billion bond-buying program known as quantitative easing (QE3). If indeed scaled back, then another important question remains: how much will the bond-buying program be toned down? Today (18/09), is the last day of the Fed's FOMC meeting in which these decisions are made. The market expects no drastic end to the program, instead a gradual toning down (between USD $10 to $20 billion) is anticipated.

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After it was reported that Garuda Indonesia, Indonesia's state-controlled national air carrier, postponed its rights issue, the company stated that it highly doubts an initial public offering (IPO) of its subsidiary Garuda Maintenance Facility (GMF) AeroAsia on the Indonesia Stock Exchange (IDX) in 2013. The reason for this postponement is current lingering uncertainty that plagues emerging markets, including Indonesia, since May 2013. Uncertainty about the future of the Federal Reserve's quantitative easing program led to a large outflow of foreign funds.

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After a strong performance yesterday, the Jakarta Composite Index (IHSG) fell 0.10 percent to 4,517.62 points on Tuesday (17/09). Part of the investor community grabbed their chance to engage in profit taking after yesterday's gain but most investors are careful and reluctant to make any major decision prior to the result of the Federal Reserve's FOMC meeting (17-18 September). It is expected that after this meeting there will be more clarity about the future of the Fed's quantitative easing program.

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Rising indices on Wall Street at the end of last week were a major factor behind rising stock indices in Asia, including Indonesia's benchmark stock index (IHSG), on Monday (16/09). For market players this development was a sign to enter the market. Moreover, expectation has emerged that the Federal Reserve will not take any drastic decisions in the FOMC meeting (on 17-18 September) regarding its quantitative easing program. This expectation has calmed down markets. Indonesia's IHSG rose 3.35 percent to 4,522.54 points.

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Last week, Indonesia's benchmark stock index (IHSG) climbed 7.3 percent to end at 4,375.53 on Friday (13/09). This growth is remarkable as it remains unknown what the Federal Reserve will do with its quantitative easing program (QE3). The next Fed meeting - scheduled for 17-18 September - is expected to provide more clarity regarding this matter. Positive sentiments that lifted the IHSG were Indonesia's slightly increased foreign exchange reserves, its stable rupiah after another BI rate hike, and the Bilateral Swap Deals (BSA) with Japan and China.

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Despite concerns that Indonesia's benchmark stock index (IHSG) would weaken on Thursday's trading day (12/09), the index ended 0.17 percent up to 4,356.61 points. Indices on Wall Street and in Asia impacted positively on the IHSG and kept foreign investors increasing their stock portfolios in Indonesia. Moreover, the Bank Indonesia's decision to raise the country's benchmark interest rate (BI rate) by 25 basis points to 7.25 percent was generally well-received by investors. Banking stocks helped to support the IHSG.

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It was decided at the Board of Governors’ meeting (RDG) of Bank Indonesia on 12 September 2013 to raise the BI Rate by 25 bps to 7.25%, the rate on the Lending Facility by 25 bps to 7.25% and the rate on the Deposit Facility by 25 bps to 5.50%. This action forms part of the follow-up measures taken to reinforce the policy mix instituted by Bank Indonesia, which focuses on controlling inflation, stabilizing the rupiah exchange rate and ensuring the current account deficit is managed to a sustainable level.

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According to data from the Indonesian Cement Association (ASI), domestic cement sales have fallen 5.8 percent to 3.3 million tons in August 2013 (from the same month last year). Being an important indicator of economic expansion (as cement sales inform about the development of property and infrastructure projects in the country), these lower cement sales confirm the slowing pace of economic growth in Indonesia. Compared to July 2013, cement sales in Indonesia fell by a massive 32 percent.

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Without any real negative global reasons, Indonesia's benchmark stock index (IHSG) was down 0.20 percent to 4,349.42 points. Apparently, market participants were looking for profit taking after the index rose sharply in the last couple of days. There may also have been the psychological influence of the gaps at 4,191-4,225 and 4,072-4,102 that still need to be closed. Will the IHSG close these? Compared to the general upward trend of Asian indices, it seems strange if the IHSG would deviate from this trend only to close the gaps.

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Good economic data from China and Japan made many Asian stock indices go into green territory, including Indonesia's benchmark stock index (IHSG) which gained 3.98 percent to close at 4,358.14 points on Tuesday (10/09) despite the lack of positive internal factors in Indonesia. Promising European openings also provided support for the index. Foreign investors, similarly to yesterday, were net purchasers of Indonesian assets, while domestic investors mostly sold their assets.

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