Both the rupiah exchange rate and the Jakarta Composite Index strengthened significantly on Monday's trading day (13/01) after the government introduced a milder version of its mineral ore export ban on Sunday (12/01). Full implementation of the ban would have burdened the country's already wide current account deficit. The ban immediately pushed up the nickel and copper prices today. The central bank's Jakarta Interbank Spot Dollar Rate (JISDOR) rose 1.75 percent to IDR 12,047 per US dollar on Monday (13/01).
Based on the Bloomberg Dollar Index, the rupiah appreciated 0.81 percent to IDR 12,063 per US dollar at 13:45 local Jakarta time.
Indonesia Stock Exchange
Along with the sharp appreciation of the Indonesia rupiah exchange rate, Indonesia's benchmark stock index (Jakarta Composite Index) rose 2.51 percent to 4,361.82 points during the first trading session on Monday (13/01). The country's banking, property and construction sectoral indices rose due to the strengthening rupiah. Even the mining sectoral index rose 1.02 percent in the first session despite the implementation of the controversial Mining Law Nr.4/2009 which bans the export of unprocessed minerals starting from Sunday 12 January 2014.
The Jakarta Composite Index is also supported by rising global stock markets at the end of last week after US non-payroll increased at the slowest pace since January 2011 (74,000 workers were added in December 2013). This tempers concern that the US Federal Reserve will cut its stimulus program (quantitative easing) further. Moreover, foreign hedge funds are back to invest in Indonesian stocks. The central bank's decision to keep its benchmark interest rate (BI rate) at 7.50 percent at last week's Board of Governor's meeting is also considered a contributing factor as it indicates that the macroeconomy of Indonesia is still solid.
Top gainers (among Indonesia's blue chips) in the first trading session were Indocement Tunggal Prakarsa (+5.50 percent), Unilever Indonesia (+2.89 percent), Semen Indonesia (+4.19 percent), Adira Dinamika Multi Finance (+6.87 percent) and Bank Rakyat Indonesia (+6.90 percent).