Indonesian Stocks & Rupiah Update: Flat Performance on Tuesday
While most Southeast Asian stock markets and emerging Asian currencies strengthened on Tuesday (03/03) on the back of a rebounding yen and - contrary to expectation - the decision of the Reserve Bank of Australia (RBA) to leave its cash rate a record low of 2.25 percent, Indonesian stocks and the rupiah performed rather flat. The benchmark Jakarta Composite Index fell 0.06 percent to 5,474.62 points, while the Indonesian rupiah rate appreciated 0.01 percent to IDR 12,969 according to the Bloomberg Dollar Index.
Indonesian stocks were slightly down today as market participants, particularly domestic investors, engaged in profit-taking after the benchmark index closed at an all-time high on Monday. Meanwhile, foreign investors recorded net buying of IDR 289.3 billion (USD $22 million).
Jakarta Composite Index:
Australia’s currency gained after the country’s central bank left its key interest rate unchanged, thus providing support to emerging Asian currencies, including the Indonesian rupiah. However the Reserve Bank of Australia (RBA) stated that it may implement monetary easing measures in the period ahead. Many analysts expected the RBA to cut its rate as the Asian region has seen a number of central banks lowering their interest rate environment in a move to combat looming deflation and support economic growth. Last Saturday, China’s central bank cut its benchmark rates by 25 basis points.
Meanwhile, the Indonesia government sold IDR 10 trillion (approximately USD $771 million) worth of conventional bonds at a bond auction on Tuesday (03/03), meeting the target. The one-year T-bills had a weighted average yield of 5.89000 percent (lower than the 6.24200 percent at the auction on 16 February), the three-month T-bills had a weighted average yield of 5.31500 percent, the nine-year and 19-year bonds had weighted average yield of 6.93270 percent and 7.33941 percent, respectively (lower than the previous sales of 7.26658 percent and 7.69798 percent, respectively). Total incoming bids were IDR 22.842 trillion, below the incoming bids of IDR 36.090 trillion for the previous auction.
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.24 percent to IDR 12,962 per US dollar on Tuesday (03/03).
Indonesian Rupiah versus US Dollar:
| Source: Bank IndonesiaThe rupiah is still the worst performing currency among the 11 Asian currencies tracked by Bloomberg. The rupiah lost over 4 percent against the US dollar in 2015 so far.
Further Reading:
• Indonesian Rupiah Affected by China Central Bank’s Interest Cut
• Analysis Performance of the Indonesian Rupiah Exchange Rate
• Bank Indonesia Lowers Key Interest Rate in Surprise Move
• Economy of Indonesia: Inflation, Trade, Interest Rates & Rupiah Update