The Indonesian rupiah exchange rate and benchmark stock index (IHSG or Jakarta Composite Index) both plunged severely after the US Federal Reserve announced on Wednesday (19/03) to cut another USD $10 billion from its bond-buying program (quantitative easing). Moreover, speculation arose that US interest rates may increase in 2015 (the US central bank had kept interest rates close to zero for over five years to stimulate economic growth). It led to tumbling stocks, bonds and currencies across Asia on Thursday (20/03).
Amid the decline of Asian currencies and stocks as funds are flowing out, Indonesia seems to be hit hardest. Indonesia’s rupiah led losses in Asian currencies. Based on the Bloomberg Dollar Index, it had depreciated 1.13 percent to IDR 11,443 against the US dollar at 14:15 local Jakarta time. Meanwhile, the IHSG had fallen about 2.40 percent to 4,705.63 points around the same time.
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.83 percent on Thursday (20/03) to IDR 11,407 per US dollar.