Rupiah Update: Weak US Jobs Data Supports Indonesian Assets

In the USA, the world’s largest economy, employers added 126,000 new jobs in March, the smallest gain since December last year, effectively ending a 12-month streak of gains above 200,000. However, the US unemployment rate remained at 5.5 percent, meaning that market participants had to absorb mixed news. But generally, markets are now expecting that the Federal Reserve will still be patient before raising its key rate, thus resulting in investors’ appetite for emerging market assets such as Indonesian stocks and the rupiah. Perhaps the fall of 2015 is considered a better timing to raise US interest rates. This may provide opportunity for the Indonesian rupiah to gradually appreciate against the greenback in the short-term.

Moreover, there are indications that US economic growth has slowed in the first quarter of 2015 due to the harsh winter as well as slowdowns at factories and lackluster construction activity. The US government also cut its previous estimates of job gains in February and January by a combined 69,000.

However, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.45 percent to IDR 12,942 per US dollar on Monday (06/04).

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia

Indonesia’s benchmark stock index (Jakarta Composite Index) was up 0.45 percent to 5,480.73 points at 15:30 local Jakarta time on Monday (06/04).

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