According to markets, chances of a Fed Fund Rate hike in 2015 have diminished after the release of the Federal Reserve's September policy meeting minutes as Fed officials are concerned about the negative effects of slowing economic growth in China and possible weaker US exports in case the US dollar's bullish momentum persists. Interest-rate futures are now pricing in a 39 percent chance of a US interest rate hike by December 2015, down from a 60 percent likelihood a month ago. Before the release of the September minutes markets had already began to speculate that the Fed will delay a rate hike as US jobs growth data in September was disappointing.

Higher oil and commodity prices (Brent crude is up 12 percent this week) also boost the value of Indonesia's rupiah and Malaysia's ringgit. Both currencies are still the worst-performing Asian currencies so far in 2015 (against the US dollar) but are now rapidly repairing losses. Between the start of October and today (09/10), the rupiah has appreciated 9.1 percent against the greenback (but is still down 7.7 percent so far this year).

Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 2.1 percent to IDR 13,521 per US dollar on Friday (09/10).

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia

Today, Asian stocks carry the global rally forward and are on track to post the best weekly gain in almost four years. Indonesia's benchmark Jakarta Composite Index was up 2.53 percent to 4,604.96 points by 13:20 pm local Jakarta time on Friday (09/10). Investors, back in emerging markets, are apparently searching for those emerging market assets that have fallen the most during the global selloff that occurred over the past months amid concern about China's hard landing and looming monetary tightening in the USA.

However, despite this week's strong performance, the recent selloff in Indonesian assets proves that these assets are among the most vulnerable assets to a Fed Fund Rate hike. Foreign investors pulled around USD $2 billion from Indonesian stocks and local-currency sovereign bonds in the third quarter of 2015. It should be remembered that the underlying problems that caused these capital outflows have not gone away: at some point the Federal Reserve will raise US interest rates, while sluggish global growth (particularly China's slowdown) continues to undermine commodity prices as well as Indonesia's trade and current account balances. As such, a major selloff in Indonesian assets should occur again when speculation about a Fed Fund Rate hike heightens again, later this year or possibly early next year. In the meantime, investors can try to make good profits.