Based on the Bloomberg Dollar Index, the Indonesian rupiah exchange rate appreciated 0.15 percent to IDR 11,647 per US dollar on Wednesday (26/02). All through the day, the currency traded within a fairly narrow trading range, possibly due to market participants' wait and see attitude ahead of the release of important US economic indicators. As the US economy is improving and the US unemployment rate is declining, the Federal Reserve may wind down its quantitative easing program in a more aggressive manner soon.

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The Indonesian rupiah exchange rate depreciated 0.14 percent to IDR 11,665 per US dollar on Tuesday (25/02) based on the Bloomberg Dollar Index. The currency's depreciation was due to US dollar demand from Indonesian importers while offshore funds engaged in profit taking as the rupiah is the best performer in February 2014 among 31 major currencies tracked by Bloomberg (against both the euro and US dollar). The rupiah is also the best-performing Asian currency this year so far.

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Indonesia's national car industry is expected to contribute IDR 44 trillion (USD $4 billion) to the country's total exports in 2014 through the export of completely built units (CBU), completely knock down units (CKU) and automotive spare parts. Exports of CBUs are estimated to rise more than 18 percent to 200,000 units in 2014, supported by increased domestic production capacity, according to Budi Darmadi, an official at Indonesia's Ministry of Industry. Darmadi declined to estimate exports of CKUs and spare parts this year.

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On 16 February 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as Bank Indonesia's benchmark interest rate, the rupiah exchange rate, tourism, trade balance, the eruption of Mount Kelud, cement sales, an update on the MP3EI, and more.

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Indonesia's rupiah exchange rate continues its sharp appreciation on Valentine's day (14/02). Based on the Bloomberg Dollar Index, the currency was up 0.80 percent to IDR 11,880 per US dollar at 9:56 local Jakarta time. Yesterday (13/02), the rupiah had recorded a 0.89 pecent gain. This recent appreciating trend of the rupiah is caused by international investors' renewed confidence in Indonesia's macroeconomic fundamentals. Particularly the improvement in the country's current account deficit is well received by investors.

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On 9 February 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as an analysis of economic growth in 2013, the trade balance, new IPOs on the stock exchange, an update on January 2014 inflation, and more.

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Credit growth in Indonesia's banking sector in 2014 is estimated to range between 17 and 18 percent. This estimation is higher than the central bank's target of 15 to 17 percent but lower than credit growth in 2013. According to Indonesia's Financial Services Authority (Otoritas Jasa Keuangan, OJK), this pace of growth is at a safe level. Third party funds are projected to grow 16 to 16.5 percent, while the OJK did not provide an estimation of the loan to deposit ratio (LDR) yet although it did say that the LDR was at a safe level too.

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Indonesian stocks and the country's currency feel the negative impact of the further winding down of the Federal Reserve's bond-buying program (quantitative easing). Yesterday (29/01), it was announced that the Fed will cut the bond-buying program by USD $10 billion to USD $65 billion per month. Among market participants concern emerged about the stability of emerging economies amid the tapering as capital outflows are expected. After opening, the benchmark stock index of Indonesia (IHSG) immediately fell more than 1 percent.

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On Wednesday (29/01), the Federal Reserve (Fed) announced to cut its massive bond-buying program (quantitative easing, QE) by another USD $10 billion after the FOMC meeting, while maintaining interest rates close to zero. Originally, the Fed's QE program, implemented in September 2012, totalled USD $85 billion per month but after the cuts in December 2013 and January 2014, it is now wound down to USD $65 billion per month and if the pace of tapering continues, the program might be over by the end of 2014.

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Asian stocks and currencies strengthened on Wednesday (29/01) after the central banks of Turkey and India tightened their monetary policies in order to attract capital inflows and restore investors' confidence. The central bank of Turkey raised its overnight lending rate aggresively from 7.75 percent to 12 percent on Tuesday (28/01); a measure which managed to calm down Asian markets. According to the Bloomberg Dollar Index, the Indonesia rupiah exchange rate appreciated 0.20 percent to IDR 12,166 per US dollar on Wednesday.

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Indeks harga konsumen Indonesia turun di bulan Februari 2015, mencatat deflasi 0,36% dalam basis month-on-month (m/m), sementara tingkat inflasi tahunan (y/y) nasional berkurang menjadi 6,29%, turun dari 6,96% (y/y) di bulan sebelumnya. Tekanan-tekanan inflasi berkurang terutama karena menurunnya harga cabai dan bahan bakar. Berkurangnya tingkat inflasi di negara dengan ekonomi terbesar di Asia Tenggara ini bisa menyediakan ruang bagi bank sentral (Bank Indonesia) untuk memotong suku bunga lebih lanjut di tahun ini.

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The Indonesian rupiah exchange rate continued to depreciate on Monday (02/03). According to the Bloomberg Dollar Index, Indonesia’s currency depreciated 0.30 percent to IDR 12,970 per US dollar, a six-year low. Apart from general bullish US dollar momentum in recent months (amid monetary tightening in the USA), the rupiah weakened due to Bank Indonesia’s signals that it tolerates a weaker currency in a move to boost exports (limiting the country’s current account deficit), and due to China’s interest rates cut.

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Nilai tukar rupiah menguat pada Senin (16/02) karena neraca perdagangan dan neraca transaksi berjalan membaik, sementara dolar AS melemah karena penjualan ritel AS yang mengecewakan dan karena optimisme bahwa Yunani akan tetap menjadi anggota zona euro. Sementara itu, kementerian keuangan Indonesia mengadakan lelang obligasi konvensional di mana Rp 12 triliun dijual. Berdasarkan data Bloomberg, rupiah terapresiasi 0.35 persen menjadi Rp 12,753 per dolar AS pada Senin (16/02).

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The Indonesian rupiah exchange rate appreciated and Indonesian stocks rose on Wednesday (04/02) on the back of rallying oil prices, a successful bond auction, easing tensions in Europe, and weak US factory orders. Based on the Bloomberg Dollar Index, Indonesia’s rupiah appreciated 0.21 percent to IDR 12,630 per US dollar on Wednesday (04/03). Meanwhile, the benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) climbed 0.45 percent to 5,315.28 points.

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Positive macroeconomic data of Indonesia - involving the significantly lower trade deficit in 2014 and easing inflation - had a good impact on the Indonesia rupiah exchange rate on Tuesday (03/02) although prior to closing the currency somewhat slid after Australia's central bank cut its interest rates causing speculation of further policy easing around the Asia Pacific region in a move to support sluggish growth and avert deflation. Most emerging Asian currencies strengthened on Tuesday against the US dollar on stronger risk appetite.

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Both Indonesia’s rupiah exchange rate and stocks strengthened on Tuesday (27/01) as concerns about Greece exiting the Eurozone somewhat eased while the positive market sentiments that were caused by the European Central Bank’s recently unfolded quantitative easing program are still felt. Indonesia’s benchmark stock index (Jakarta Composite Index) gained 0.33 percent to 5,277.15 points, while the rupiah appreciated 0.31 percent to IDR 12,469 per US dollar based on the Bloomberg Dollar Index.

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Indonesian stocks hit a record high on Thursday (22/01). Most emerging Asian stocks and currencies strengthened on increased speculation that the European Central Bank (ECB) is to launch a massive bond-buying program (which was confirmed later on the day after Asian markets had closed), a move aimed at boosting inflation in the Eurozone and which puts pressure on euro-denominated assets. The euro had depreciated 1.67 percent against the US dollar by 11:20 ET on Thursday based on Bloomberg data.

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The Indonesian rupiah exchange rate appreciated 0.76 percent to IDR 12,481 per US dollar on Wednesday (21/01) based on the Bloomberg Dollar Index. The performance of the rupiah was in line with most other emerging Asian currencies as Japan’s yen strengthened (against the US dollar) after Japan’s central bank announced to maintain an accommodative monetary policy in an attempt to boost inflation to two percent (y/y). Furthermore, speculation about quantitative easing in Europe boosted attractiveness of riskier Asian assets.

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The Indonesian rupiah exchange rate depreciated on Wednesday (14/01) as global oil and other commodity prices continued to fall thus casting a negative spell on Indonesia’s currency. The rupiah depreciated 0.11 percent to IDR 12,614 per US dollar according to the Bloomberg Dollar Index. Market participants are concerned about the negative influence of low commodity prices on Indonesia’s export performance. Southeast Asia’s largest economy has had to cope with a wide trade and current account deficit in recent years.

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In line with the performance of other Asian emerging currencies, Indonesia's rupiah exchange rate appreciated on Monday (12/01) as the fall in US wages (released late last week) caused speculation that the Federal Reserve will - for now - delay its plan to start raising US borrowing costs. Despite solid growing US non-farm payrolls in December 2014, US wages (average hourly earnings) fell the most in eight years. Indonesia’s rupiah appreciated 0.38 percent to IDR 12,599 per US dollar according to the Bloomberg Dollar Index.

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