The central bank of Indonesia (Bank Indonesia) announced that the country’s foreign exchange reserves fell by USD $3.9 billion to USD $111.6 billion at the end of March 2015 as the central bank used part of the forex reserves to support the Indonesian rupiah which had started to depreciate markedly due to bullish US dollar momentum amid further looming monetary tightening in the USA. The rupiah had fallen to a 17-year low of IDR 13,237 per US dollar in mid-March as market players are anticipating an interest rate hike in the USA.

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Minutes of the Federal Reserve’s latest FOMC meeting (17-18 March), released Wednesday (08/04), show that the US central bank is divided about the timing of higher US interest rates. Several policymakers would approve such an interest rate hike in June 2015, while others would prefer to see rates increase later this year or even next year as they consider that the US economy is still not strong enough yet. However, when reading the minutes there are some signs suggesting that the institution is on course to raise its key rate this year.

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Indonesian stocks and the rupiah are performing well on Monday’s trading day (06/04) after weak US economic data suggests that the US central bank (Federal Reserve) will still refrain from raising its key interest rate too soon. Weaker-than-expected US jobs data caused that most Southeast Asian stock markets strengthened today. Moreover, the rupiah also felt the positive impact. According to the Bloomberg Dollar Index, the rupiah had appreciated 0.54 percent to IDR 12,950 per US dollar by 15:17 pm local Jakarta time.

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Indonesian stocks continued to climb strongly after the market opened on Tuesday (31/03). The country’s benchmark Jakarta Composite Index (IHSG) surged nearly one percent. Several external and internal factors are at play here. Firstly, the US Federal Reserve indicated over the past week that it may not raise its key interest rate too soon, leading to investors’ appetite for emerging market assets. Secondly, Chinese policymakers provided room for increased infrastructure spending and monetary stimulus.

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Whereas the Indonesian rupiah is depreciating on Monday’s trading day (30/03), Indonesian stocks climb significantly. At 14:15 pm local Jakarta time, the benchmark stock index (Jakarta Composite Index) had gained 0.93 percent to 5,444.27 points. In line with other Asian markets, Indonesia’s stock index felt the positive impact of Fed Chief Janet Yellen’s statements on Friday (27/03). Yellen indicated in a speech in San Francisco that it is riskier to raise US interest rates too fast than to raise them too slowly.

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Dalam beberapa hari terakhir dollar Amerika Serikat (AS) kembali mendapatkan momentum bullish dan menguat terhadap sebagian besar mata uang termasuk rupiah. Dollar AS berada di bawah tekanan setelah Federal Reserve memberikan sinyal - kontras dengan ekspektasi pasar - bahwa Fed tidak akan menaikkan suku bunga dalam waktu dekat karena prospek pertumbuhan ekonomi AS dan inflasi AS belum ada di posisi yang diinginkan. Hal ini membuat aset pasar-pasar lebih menarik untuk jangka pendek. Namun, perkembangan ini tampaknya hanya berlangsung sebentar.

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Nilai tukar rupiah mengawali minggu ini dengan posisi kuat karena dollar Amerika Serikat (AS) melemah akibat ketidakjelasan mengenai waktu kenaikan suku bunga AS. Kontras dengan dugaan awal, meeting Federal Reserve yang terakhir (diadakan 17-18 Maret) mengindikasikan bahwa belum akan ada kenaikan suku bunga dalam waktu singkat di negara dengan ekonomi terbesar. Hal ini mendorong meningkatnya minat untuk aset-aset pasar negara berkembang. Apalagi, Pemerintah Indonesia dan Bank Indonesia berjanji akan menjaga stabilitas rupiah.

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Tampaknya, pesan Federal Reserve bahwa Fed masih menunda menaikkan suku bunga di Amerika Serikat (AS) hanya mengimplikasikan periode singkat pelemahan dollar AS terhadap mata uang Asia. Pada hari Jumat (20/03), rupiah melemah 0,51% menjadi Rp 13.124 per dollar AS menurut Bloomberg Dollar Index. Volatilitas tinggi pada saat ini juga merupakan akibat dari kebijakan berbeda yang diterapkan oleh berbagai bank sentral. Sementara Federal Reserve AS bertekad untuk lebih mengetatkan kebijakan moneternya, bank sentral di Jepang dan Eropa melakukan sebaliknya.

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Saham di Indonesia dan nilai tukar rupiah menguat tajam pada hari Kamis (19/03) setelah Federal Reserve menunda menaikkan suku bunga acuannya dalam Pertemuan Federal Open Market Committee (FOMC) selama dua hari yang berakhir pada hari Rabu (18/03) karena inflasi Amerika Serikat (AS) masih rendah sedangkan pertumbuhan ekonomi AS sedikit melambat. Bank sentral AS menberikan sinyal bahwa Fed tidak terburu-buru untuk menaikkan suku bunga acuannya. Di sisi lain, Fed juga menghapuskan kata 'sabar' dari panduannya untuk suku bunga (yang berada dalam posisi paling rendah sejak akhir 2008).

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Bank Sentral Indonesia (Bank Indonesia) memutuskan untuk tetap menjaga suku bunga acuannya pada 7,5% sebagai hasil keputusan pertemuan Dewan Gubernur Bank Indonesia (BI) yang dilakukan hari ini. Suku bunga overnight deposit facility dan suku bunga lending facility dipertahankan masing-masing 5,5% dan 8%. BI menganggap bahwa kondisi suku bunga saat ini sesuai dengan targetnya untuk mendorong inflasi ke dalam target antara 3,0% sampai 5,0% dalam basis year on year (y/y) di tahun 2015 dan mengurangi defisit neraca transaksi berjalan Indonesia antara 2,5% sampai 3,0% dari produk domestik bruto (PDB).

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The benchmark stock index of Indonesia - known as the Jakarta Composite Index or IHSG - rose 0.17 percent to 4,921.39 points on Tuesday (13/05), impacted by investors' reaction to positive earnings reports of Indonesian coal miners in the first quarter of 2014. Today, foreign investors recorded net buying of IDR 64 billion (USD $5.6 million) and accounted for 31 percent of trading activity. However, investors remain cautious ahead of the presidential election that is scheduled for 9 July 2014 and wait for more clarity about the (vice) presidential candidates that will compete.

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While most emerging Asian currencies fell, the Indonesian rupiah exchange rate appreciated 0.08 percent to IDR 11,523 per US dollar based on the Bloomberg Dollar Index on Monday (12/05). The depreciating Chinese yuan, after its central bank set the midrate at its lowest level in eight months, put pressure on other Asian currencies. Today, Indonesia's Finance Ministry sold IDR 10 trillion rupiah (USD $867 million) of bonds, higher than the indicative target of IDR 8 trillion rupiah. Meanwhile, Indonesia’s two-year bonds gained.

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Completely opposite to our expectations, the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) managed to climb 0.57 percent to 4,862.02 points on Wednesday (07/05). The gain was unexpected as there were no clear factors that could provide positive market sentiments. Moreover, today's Asian stock indices were mostly down. Coincidence or not, tomorrow Bank Indonesia will announce whether its benchmark interest rate (BI rate) - currently set at 7.50 percent - will be changed or maintained.

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At the end of Friday’s trading day (02/05), the Indonesian rupiah exchange rate appreciated 0.32 percent to IDR 11,525 per US dollar based on the Bloomberg Dollar Index. The rupiah performed better than most of its regional emerging peers as inflation and trade data, which were released today by Statistics Indonesia, provided positive market sentiments. Indonesian inflation eased to 7.25 percent (year-on-year) in April 2014, from 7.32 percent a month earlier. Meanwhile, the country posted a trade surplus of USD $673 million in March 2014.

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On the first trading day of the week (Monday 28 April 2014), the Indonesian rupiah exchange rate depreciated 0.19 percent to IDR 11,587 per US dollar based on the Bloomberg Dollar Index. Several factors - both internal and external - influenced the rupiah as well as Indonesian stocks in a negative way. The benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) declined a whopping 1.61 percent to 4,818.76 points, in line with the regional trend in Asia today.

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The Indonesian rupiah exchange rate ended the week with a 0.32 percent gain to IDR 11,565 per US dollar on Friday (25/04) based on the Bloomberg Dollar Index. Despite still high local demand for US dollars ahead of the month-end (for reasons of profit repatriation, imports and debt repayments), the rupiah managed to appreciate as (foreign and domestic) investments in Indonesia were reported to have reached a new record at IDR 106.6 trillion (USD $9.4 billion) in the first quarter of 2014.

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Due to a lack of positive domestic and external sentiments, the Indonesian rupiah exchange rate has depreciated to a six-week low against the US dollar. Based on the Bloomberg Dollar Index, Indonesia's currency declined 0.66 percent to IDR 11,521 per US dollar by 16:22 local Jakarta time. In fact, several negative domestic sentiments are the reason behind the current depreciation. Firstly, revived concerns about Indonesia's current account deficit and, secondly, concerns about capital outflows due to dividend payments.

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After having recorded a five-day winning streak, Indonesia's benchmark stock index (known as the Jakarta Composite Index or IHSG) fell 0.10 percent to 4,892.29 points on Monday (21/04). The forming of a doji star and limited movement of the IHSG (due to reduced buying volume) implied that - without the publication of good news triggering positive market sentiments - the index would decline. Today's depreciation of the Indonesian rupiah exchange rate and mixed Asian indices were reasons for investors to engage in profit taking.

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Indonesia's benchmark stock index (known as the IHSG or Jakarta Composite Index) posted another small gain on Wednesday (16/04), thus extending its winning streak to four days. The index gained 0.06 percent to 4,873.01 points. Despite slowing GDP growth in China, a depreciating rupiah exchange rate (responding to slightly higher US chain store sales and expected higher US building permits as well as US manufacturing production) and foreign investors recording a net sell, the index stayed in the green zone.

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The Indonesian rupiah exchange rate moved within limited range on Wednesday. Based on the Bloomberg Dollar Index, the currency depreciated 0.07 percent to IDR 11,436 per US dollar. Since Thursday (10/04), the rupiah has had to cope with pressures as Indonesia's legislative election was unable to provide political certainty. On the other hand, the country's improved economic fundamentals - easing inflation and the narrowing current account deficit - have resulted in capital inflows, thus supporting the rupiah.

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