Update COVID-19 in Indonesia: 70,736 confirmed infections, 3,417 deaths (9 July 2020)
6 July 2020 (closed)
USD/IDR (14,501) +55.01 +0.38%
EUR/IDR (16,343) -41.31 -0.25%
Jakarta Composite Index (5,052.79) -23.38 -0.46%
Yesterday (07/06), the main index of the Indonesia Stock Exchange (IHSG) fell by a total of 2.7 percent to close at 4,865.32 points. The size of this single day fall of Indonesia's IHSG has not been seen since November 2011 and illustrates waning confidence in Indonesia's economy. For eleven days in a row, foreign investors have been engaged in net selling as they have been concerned about ongoing uncertainty regarding the price hike of subsidized fuel, the continuing trade deficit as well as the steady fall of the IDR rupiah.
Previously, foreign sales of Indonesian stocks were cushioned by domestic purchases. However, it seemed on Friday that domestic investors had also lost confidence after being confronted by 11 days of foreign net selling.
Apart from domestic economic conditions that triggered the outflow of money, the Federal Reserves' intention to scale back its bond-buying program (quantitative easing) is also regarded as a concern of investors in the Indonesian market as Indonesia has been one of the countries that benefits from excess global liquidity.