The central bank of Indonesia (Bank Indonesia) announced that its foreign exchanges reserves had risen to USD $107.0 billion by the end of May 2014, up from USD $105.6 billion at the end of the previous month. This increase primarily stemmed from government oil and gas export earnings as well as an influx of foreign portfolio capital into Southeast Asia's largest economy, which reflects the positive perception of international investors with regard to the economic fundamentals of Indonesia.

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The Indian rupee depreciated 0.4 percent to 58.7150 per US dollar on Monday (26/05), the most in a month on speculation that India's central bank intervened to deliberately weaken the currency after it had gained 2.8 percent against the US dollar this month (becoming the best performing Asian currency). The rupee gained due to optimism about the new government's ability to boost the economy (which has slowed down considerably in recent years). However, the central bank expects that a too strong rupee will hurt the country's exports.

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The foreign exchange reserves at the central bank of Indonesia (Bank Indonesia) increased about USD $3 billion to USD $105.6 billion at the end of April 2014, the highest level in 15 months, particularly due to export earnings of government-owned oil and gas exporters. Bank Indonesia said that the current position of forex reserves is equivalent to 6.1 months of imports or 5.9 months of imports and servicing external debt (well above the international standard of three months of imports). Today, the central bank's Board of Governors Meeting is held.

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Based on the Bloomberg Dollar Index, the Indonesian rupiah exchange rate appreciated 0.23 percent to IDR 11,603 per US dollar on Thursday (24/04). The currency's performance was particularly influenced by weak new US single-family homes sales. These sales fell more than expected and hit a five-month low in February 2014, implying that there is continued weakness in the US housing market. Meanwhile, US durable goods orders and US initial jobless claims, which will be released later today, are expected to be weak too.

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The Indonesian rupiah exchange rate continued its recent weakening trend on Wednesday (23/04). Based on the Bloomberg Dollar Index, Indonesia's currency had depreciated 1.12 percent to IDR 11,650 per US dollar at 12:45 local Jakarta time, its weakest level in two months. Reasons for this poor performance are weak Chinese manufacturing data, renewed concerns about Indonesia's wide current account deficit and ongoing political uncertainty after the fragmented outcome of Indonesia's 2014 parliamentary election.

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Indonesia’s official foreign exchange reserve assets stood at USD $102.6 billion as of the end of March 2014, a slight decline from the level of USD $102.7 billion in the previous month. The decline was mainly due to government payments in the context of its maturing global bond in March 2014. At this level, reserve assets can adequately cover 5.9 months of imports or 5.7 months of imports as  well as servicing of government external debt repayment, well above the international standards of reserves adequacy at three months of imports.

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Most emerging currencies in Asia appreciated against the US dollar on Monday (07/04) as the 192,000 jobs that were added by US employers in March 2014 are believed to be too low to trigger an early interest rate hike by the US Federal Reserve. The new jobs data did not meet expectation, particularly after the strong US private jobs report. Meanwhile, trading in Asia was subdued as China's financial markets were closed (due to the Qingming Festival also known as Tomb Sweeping Day).

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The Indonesian rupiah exchange rate moved rather sideways on Friday (04/04). Based on the Bloomberg Dollar Index, the currency appreciated 0.06 percent to IDR 11,316 per US dollar. Most emerging Asian currencies tended to depreciate against the greenback as the market is waiting for US unemployment data, released later today. Overall, market participants remain confident in Indonesia's economic fundamentals as inflation eased to 7.32 percent (yoy) in March, while the country posted a trade surplus of USD $785 million in February.

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As had been confirmed by Agus Martowardojo, Governor of Bank Indonesia, earlier this week, Indonesia's foreign exchange reserves rose 2.1 percent to USD $102.74 billion at the end of February 2014, particularly due to strong capital inflows. According to Martowardojo, capital inflows in the first two months of 2014 exceed net capital inflows throughout 2013. Bank Indonesia regards the current foreign exchange reserves sufficient to underpin external sector resilience and maintain sustainable economic growth in Indonesia looking ahead.

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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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Contrary to the positive performance of the benchmark stock index of Indonesia on Monday’s trading day (01/09) and despite positive domestic economic data released by Statistics Indonesia, the Indonesian rupiah exchange rate depreciated 0.22 percent to IDR 11,716 per US dollar based on the Bloomberg Dollar Index on Monday (01/09). The main reason for the currency’s depreciation is the strengthening US dollar as US economic data are improving and inflation is slowing in the Eurozone.

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The benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) fell 0.14 percent to 5,198.90 points on the last trading day of the week, the first day of decline in five trading days, as investors engaged in profit taking after Indonesia’s Constitutional Court confirmed the official election result of the General Elections Commission (KPU) that announced Joko Widodo as winner of the July 2014 presidential election. Next week investors may continue profit taking as the index is still overbought.

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The Indonesian rupiah exchange rate depreciated 0.67 percent to IDR 11,665 per US dollar on Monday (14/07) according to the Bloomberg Dollar Index. Meanwhile, the benchmark stock exchange of Indonesia (Jakarta Composite Index) declined 0.23 percent to 5,021.06 points. The main reason for weakening markets in Indonesia is investors’ wait & see attitude ahead of the official result of Indonesia’s presidential election. On 22 July 2014, the General Elections Commission (KPU) will announce the winner of the election.

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The Indonesian rupiah exchange rate continued its recent depreciating trend on Wednesday (28/05). According to the Bloomberg Dollar Index, the currency had depreciated 0.46 percent to IDR 11,633 against the US dollar at the end of the trading day. The rupiah's performance is in line with the general trend in Asia where most currencies lost ground to the greenback on today's trading day. As various US economic data indicate a continued recovery of the US economy, the market expects more US monetary tightening.

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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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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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After several days of strong performance, Indonesia's benchmark stock index (known as the Jakarta Composite Index or IHSG) felt the impact of profit taking on Tuesday (16/04). As a consquence, the IHSG's upward movement was limited and unable to completely close the gap at 4,829-4,906. At the start of the trading day, the index opened positively, but during the day - when a number of Asian indices were down - the IHSG's performance was curbed. Indonesia's benchmark index gained 0.11 percent to 4,870.21 points.

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