A more aggressive tapering policy is expected to lead to US dollar liquidity problems in Indonesia. Important US data that will be released this week include consumer confidence, durable goods orders, initial jobless claims, and GDP growth.

Meanwhile, concerns about domestic factors have eased for a while as the most recent trade data showed a December 2013 trade surplus and a quickly declining current account deficit. Inflation, however, remained high due to weather-related logistics troubles. On 3 March 2014, Statistics Indonesia will release new economic data (including February 2014 inflation and January 2014 import-exports data).

However, the central bank's Jakarta Interbank Spot Dollar Rate (JISDOR) depreciated 0.42 percent to IDR 11,669 per US dollar on Wednesday (26/02) as it absorbed yesterday's US dollar demand from Indonesian importers and offshore funds that engaged in profit taking (as the rupiah is the best-performing Asian currency this year so far).

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia

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