The Indonesian rupiah is appreciating against the US dollar on Monday (06/02). Based on the Bloomberg Dollar Index, the rupiah had appreciated 0.13 percent to IDR 13,325 per US dollar by 12:15 pm local Jakarta time. It is assumed that optimism about Indonesia's improving economic fundamentals in combination with rebounding commodity prices and slower-than-expected US economic growth supports the currency of Indonesia. Meanwhile, other Asian emerging market currencies are also appreciating against the greenback.

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The central bank of Indonesia (Bank Indonesia) announced that the nation's foreign exchange reserves climbed to USD $116.4 billion at the end of December 2016, up from USD $111.5 billion one month earlier. Growth was attributed to foreign exchange receipts, primarily stemming from the issuance of government global bonds debt securities, the withdrawal of government foreign loans, tax revenues and oil & gas export proceeds, that all surpassed the use of foreign exchange for government external debt repayments and Bank Indonesia's maturing foreign exchange bills.

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The Indonesian rupiah is appreciating sharply on Thursday (05/01) as the US dollar retreats from its (near) 14-year peak against a basket of major global currencies ahead of the release of the US Federal Reserve's December policy meeting minutes. Based on the Bloomberg Dollar Index, the rupiah had strengthened 0.83 percent to IDR 13,328 per US dollar by 14:00 pm local Jakarta time on Thursday (05/01). Particularly the unexpected fall of the US dollar against China's yuan spooks market players.

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Indonesian stocks are expected to rise on Wednesday (04/01) amid positive sentiments stemming from around the globe although the strong US dollar, which remains near 14-year highs, puts some pressure on commodity prices (most notably on crude oil). On Tuesday (03/01), Indonesia's benchmark Jakarta Composite Index declined 0.39 percent to 5,275.97 points as investors engaged in profit taking after the significant rally that occurred during the last couple of days before the end of 2016.

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On the last trading day before the Christmas break, Indonesia's benchmark Jakarta Composite Index fell for the ninth straight day, the longest losing streak since August 2005. On Friday (23/12) the index fell 0.30 percent to 5,027.70 points. The performance of Indonesian stocks was in line with other markets in Asia. Ahead of Christmas and New Year festivities, trade volume is low as investors are taking a break. Meanwhile, there are no positive sentiments stemming from the Indonesian market.

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The Federal Reserve decided - in line with expectations - to raise its benchmark Fed Funds Rate by 0.25 percent to the range of 0.50 - 0.75 percent, exactly one year after its first rate hike (in a decade). Furthermore, the Fed Chair Janet Yellen also indicated it sees three more interest rate hikes in 2017. This is a bit more hawkish than markets expected. Tighter monetary policy in the USA is required as the US labor market and growth in household spending improves. Inflation has also improved but remains below the Fed's 2 percent (y/y) target. Business investment, however, remains soft.

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The Indonesian rupiah has been appreciated significantly over the past two days versus the US dollar. By 12:00 noon local Jakarta time on Wednesday (07/12), Indonesia's currency had strengthened 0.29 percent to IDR 13,331 per US dollar (based on the Bloomberg Dollar Index). Meanwhile, Bank Indonesia's Jakarta Interbank Spot Dollar Rate (JISDOR) appreciated 0.51 percent to IDR 13,336 per US dollar today. Lets zoom in on this performance.

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Indonesian stocks and the rupiah are under pressure on Thursday (24/11). Amid rising expectation of a Fed Funds Rate hike before the year-end, the US dollar rose to a 13 year-high implying all emerging market currencies are sliding. The Indonesian rupiah, one of the more vulnerable emerging market currencies, had depreciated 0.39 percent to IDR 13,542 per US dollar by 10:20 am local Jakarta time. Meanwhile, the benchmark Jakarta Composite Index had fallen 0.85 percent to 5,167.87 points by the same time.

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Emerging markets in Asia, including Indonesia, are plagued by sharply depreciating currencies on Friday morning (11/11). Demand for the US dollar is high on the "Trump effect". With a Republican-controlled US Congress and pragmatic businessman Donald Trump in the White House, markets have become positive about US economic growth in the years ahead. Meanwhile, it feeds the likelihood of faster and more frequent Fed Funds rate hikes during Trump's administration. The Indonesian rupiah was down 5.53 percent to IDR 13,865 per US dollar by 09:18 am local Jakarta time (Bloomberg Dollar Index).

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As expected, emerging markets in Asia, including Indonesia, were negatively affected by the speech of Federal Reserve Chair Janet Yellen in Jackson Hole last week. Her speech - touching the topics of solid new jobs creation - provided ammunition for analysts and investors to raise speculation about a near-term US Fed Funds Rate hike. Indonesia's benchmark Jakarta Composite Index fell 1.25 percent to 5,370.76 points, while the Indonesian rupiah depreciated 0.42 percent to IDR 13,267 per US dollar (Bloomberg Dollar Index).

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The Jakarta Composite Index (Indonesia's benchmark stock index) fell 1.73 percent on Friday (01/11) to 4,432.58 points. A persistent concern for investors is the tapering issue of the Federal Reserve's quantitative easing program. Analysts expect the program to continue at a pace of USD $85 billion per month until at least March 2014, but investors remain concerned. Another issue that brought negative market sentiments was September's trade figure, which was released today. In September, Indonesia recorded a trade deficit of USD $657.2 million.

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In line with falling Asian indices, Indonesia's benchmark stock index (the Jakarta Composite Index or IHSG) was down on Tuesday (29/10). Investors are cautious ahead of the Federal Reserve meeting and thus used today to engage in profit taking. The IHSG fell 0.60 percent to 4,562.77 points. Moreover, the appreciating trend of the rupiah exchange rate was disturbed ahead of the Fed meeting and which also formed a contributing factor for the fall of the IHSG today. Foreign investors recorded a net sell, while domestic investors recorded a net buy.

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Wall Street and European indices being up at the end of last week had a positive impact on Asian stock indices on Monday (28/10), despite experiencing a correction during today's trading day. The Jakarta Composite Index (IHSG), Indonesia's benchmark stock index, joined this trend. After making a strong start, it became susceptible to profit taking and thus had a mixed performance although it ended at 4,590.54 points, a 0.21 percent increase. The IHSG was supported by foreign net buying and an appreciating rupiah exchange rate.

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Indonesia's benchmark stock index, the Jakarta Composite Index (IHSG), was unable to continue its rising trend of the last week on Tuesday's trading day (22/10). Mixed indices in the United States on the previous day in combination with falling indices in Asia impacted negatively on the IHSG. Other factors that contributed to the IHSG's 1.43 percent downslide to 4,512.74 on Tuesday were weak openings of stock indices in Europe as well as continued foreign selling of Indonesian stocks.

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Rising global stock indices at the end of last week continued to impact positively on Asian stock indices on Monday (21/10), including Indonesia's Jakarta Composite Index (IHSG). Moreover, speculation that the Federal Reserve will not alter its quantitative easing program until early next year also brought along positive market sentiments. This is expected to result in the inflow of US dollars into emerging markets. On Monday, the IHSG rose 0.70 percent to 4,578.18 despite continued foreign selling and rupiah depreciation.

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The Jakarta Composite Index (IHSG), the benchmark stock index of Indonesia, gained 0.61 percent and ended on 4,546.57 on Friday (18/10). Stock trade showed a consolidating trend with the value of transactions in the regular market amounting to IDR 4.39 trillion (USD $388.5 million). Considering the full trading week, the IHSG gained 0.60 percent with an average daily transaction value of IDR 4.18 trillion. This value is below the previous week's average of IDR 4,36 trillion.

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The Jakarta Composite Index (IHSG) rebounded on Thursday's trading day (17/10), supported by good news from the United States where finally an agreement was reached regarding the US debt ceiling. This agreement brought positive market sentiments on Asian stock markets, including the IHSG which rose 0.59% to 4,518.93 points. Moreover, Indonesia's minister of Economy Hatta Rajasa stated that Indonesia had not been significantly impacted by the US shutdown issue and this statement also managed to ease investors' concerns.

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Although part of the market players on Indonesia's Stock Exchange (IDX) engaged in profit taking after Indonesia's benchmark index (IHSG) climbed for two consecutive days, the index still posted growth of 0.71 percent to 4,418.64 points on Thursday (03/10). Factors that contributed to today's gain were the depreciating US dollar as no solution has been found yet concerning the shutdown, generally rising Asian stock indices and the positive message that is conveyed in the APEC meeting in Bali.

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Despite some appetite for profit taking, the key stock index of Indonesia (IHSG) was able to rise 0.96 percent to 4,387.60 points on Wednesday (02/10). The index was supported by the appreciating rupiah, a few rising Asian stock indices and foreign net stock purchases. The Indonesian rupiah rose against the US dollar as the latter was impacted upon by the debt ceiling and shutdown issue in the USA. Asian stock indices were mixed. Concerns about the shutdown were offset by rising Asian currencies against the US dollar.

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Both the Indonesian currency and the benchmark stock index (IHSG) continued their fall on Tuesday (24/09). Wall Street's weak performance on the last three trading days was a major factor that brought negative market sentiments to the Indonesia Stock Exchange (IDX). Even good openings in Europe were not able to push the IHSG back into green territory. The index fell 2.25 percent to 4,460.41 points. Foreign investors were net sellers of Indonesian stocks, while domestic investors were net buyers.

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