Update COVID-19 in Indonesia: 28,233 confirmed infections, 1,698 deaths (3 June 2020)
03 June 2020 (closed)
USD/IDR (14,245) -257.00 -1.77%
EUR/IDR (15,934) -194.64 -1.21%
Jakarta Composite Index (4,941.01) +93.50 +1.93%
Asian stocks continue to rise on positive market sentiments on Wednesday (04/11). Supported by gains on Wall Street overnight and higher crude oil prices (pushing energy stocks higher), most Asian indices surged. Investors seem to have more confidence in the world economy. Earlier this week data signal that manufacturing activity continues to expand in the US and Europe, while in China it is stabilizing. Indonesia's benchmark Jakarta Composite Index was up 1.43 percent to 4,597.69 points by 10:50 am local Jakarta time.
Besides inflation being back under control (giving rise to hope that Bank Indonesia will cut its interest rate environment), positive domestic sentiments in Indonesia are caused by optimism that the country's gross domestic product (GDP) growth figure of Q3-2015 will have improved (estimated at 4.8 percent y/y) from the growth figure in the preceding quarter (4.67 percent y/y, a six-year low). Statistics Indonesia (BPS) will release Indonesia's official Q3-2015 GDP growth figure on Thursday (05/11).
Government spending (on infrastructure projects) also gained traction, evidenced by a pickup in cement sales and bank loans. Indonesian President Joko Widodo said the government had spent 70 percent of its 2015 budget up to the end of October (in late June this figure was still at an alarmingly low 35 percent). Before the year ends, Widodo targets to see the disbursement of 94 percent of funds allocated in the 2015 budget. With household consumption weaker (due to reduced purchasing power) and commodity exports still sluggish, government spending is envisaged to be the main driver of economic growth in Southeast Asia's largest economy.
Groundbreaking Indonesian Projects Targeted by Public Works Ministry:
The Indonesian government is also set to announce a 6th economic stimulus package this week. This new package will focus on tax benefits and other policies related to special economic zones in Indonesia. Since September 2015, the government has been issuing a series of economic stimulus packages to boost the economy. These packages are believed to have contributed to rupiah stabilization over the past weeks.
Based on the Bloomberg Dollar Index, the rupiah had appreciated 0.62 percent to IDR 13,479 per US dollar by 11:00 am local Jakarta time. Meanwhile, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.98 percent to IDR 13,461 per US dollar on Wednesday (04/11).
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia