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21 April 2025 (closed)
Jakarta Composite Index (6,445.97) +7.70 +0.12%
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There is no stop to the benchmark Jakarta Composite Index in the last week of 2017. Amid mixed Asian stock markets (and thin trading volumes), Indonesian stocks are persistently touching new record highs. By 11:25 am local Jakarta time on Friday, the last trading day of the year, the Jakarta Composite Index had climbed 0.77 percent to 6,362.69 points on Friday (29/12).
Approaching the Federal Open Market Committee (FOMC) meeting - scheduled for 12-13 December 2017 - the Indonesian rupiah exchange rate remained stable on Monday (11/12). By 15:00 pm local Jakarta time, the rupiah had strengthened 0.01 percent to IDR 13,548 per US dollar (Bloomberg Dollar Index). However, several analysts warn that the rupiah is likely to depreciate if the US Federal Reserve will indeed raise its benchmark interest rate.
As we are in the middle of the fourth quarter of 2017, we detect rising pressures on the Indonesian rupiah exchange rate amid broad US dollar strength. However, the decision of Indonesia's central bank to leave its interest rate regime unchanged at the November meeting managed to give some support to the rupiah (as well as Indonesia's improving balance of payments, current account deficit, and capital and financial account).
Indonesia's benchmark Jakarta Composite Index touched a new all-time record high on Wednesday (25/10). More importantly, the benchmark index passed beyond the psychological boundary of 6,000 points and closed 1.23 percent higher at 6,025.43 points. This great performance was driven by Indonesia's energy and financial stocks.
Bank Indonesia held its key rate at 4.25 percent at the October 2017 policy meeting. This decision was in line with expectations. In fact, previously, Bank Indonesia officials had already indicated that they would pause their eagerness to ease monetary policy. Since January 2016, the central bank of Indonesia had already cut the benchmark interest rate eight times from 7.25 percent to 4.25 percent in an effort to boost economic growth.
The Indonesian rupiah appreciated slightly - by 0.09 percent - to IDR 13,464 per US dollar (Bloomberg Dollar Index) on Thursday (05/10), bucking the trend in Asia where most emerging market currencies weakened amid US dollar strength as US economic data showed that the US service sector grew at its fastest pace in 12 years in September 2017.
The Indonesian rupiah is continuing to depreciate on Monday (02/10). By 15:00 pm local Jakarta time the currency had weakened 0.71 percent to IDR 13,568 per US dollar (Bloomberg Dollar Index). Not only the rupiah, but all (emerging market) currencies are sliding in Asia on renewed US dollar strength.
Indonesian shares and the rupiah strengthened considerably on the last trading day of the week. On Friday (29/09) Indonesia's benchmark Jakarta Composite Index surged 1.02 percent to 5,900.85 points, outperforming all other national benchmark indices in the Asia-Pacific region. Meanwhile, the Indonesian rupiah appreciated 0.32 percent to IDR 13,472 per US dollar (Bloomberg Dollar Index).
The US dollar is advancing on Thursday (28/09) amid strong US dollar demand on the back of US President Donald Trump's tax reform program announcement and looming further monetary tightening by the Federal Reserve before the year-end. Rising US treasury yields naturally cause US dollar strength, hence leading to weakening emerging market currencies, with especially the Indonesian rupiah being affected significantly today.
Investors are again in search of safe haven assets on Wednesday (27/09), hence most emerging market currencies, including Indonesia's rupiah exchange rate, are weakening against the US dollar. Based on the Bloomberg Dollar Index, the rupiah had depreciated 0.28 percent to IDR 13,412 per US dollar by 14:45 am local Jakarta time. Yesterday, the rupiah had already weakened 0.37 percent against the greenback.
Latest Columns Rupiah
Car sales in Indonesia are expected to exceed the target set by the Indonesian Automotive Industry Association (Gaikindo) in 2013. The institution originally set a target of 1.1 million sold car vehicles in 2013, which is similar to the sales result in 2012. However, in September 2013 car sales recorded a new monthly record (115,921 sold units) after consumers sped up car sales as prices will increase in October. Up to the third quarter of 2013, total car sales have increased 11.2 percent compared to the same period last year.
According to Ferry Salanto, Associate Research Director at Colliers International Indonesia, the weakening rupiah exchange rate against the US dollar in recent months has resulted in an increase of property sales in Indonesia, particularly apartments. Salanto says it is not just an investment for the buyer but also a matter of security. Property is currently a better and safer alternative to the holding of rupiahs. In the third quarter of 2013, property sales increased despite the higher benchmark interest rate and the tightening property credit environment.
The Jakarta Composite Index (IHSG) rebounded on Thursday's trading day (17/10), supported by good news from the United States where finally an agreement was reached regarding the US debt ceiling. This agreement brought positive market sentiments on Asian stock markets, including the IHSG which rose 0.59% to 4,518.93 points. Moreover, Indonesia's minister of Economy Hatta Rajasa stated that Indonesia had not been significantly impacted by the US shutdown issue and this statement also managed to ease investors' concerns.
The benchmark stock index of Indonesia (IHSG) was down 0.61 percent to 4,492.26 on its first trading day after the Idul Adha celebrations (when Muslims remember that Abraham was willing to sacrifice his son to God). The main reason why the IHSG was down on Wednesday (16/10) was due to continued uncertainty about the US debt ceiling issue, while the deadline (17/10) is closing in. Fitch Ratings put US Treasury bonds on Rating Watch Negative, which might be a first step before a downgrade.
On 12 October 2013 Finance Minister and Central Bank Governors from Korea and Indonesia agreed to establish a bilateral KRW/IDR swap arrangement in the near future. The size of the swap arrangement is up to KRW 10.7 trillion/IDR 115 trillion (equivalent to USD $10 billion). The effective period of the facility will be three years, and could be extended by agreement by both sides. This Bilateral Currency Swap Arrangement (BCSA) aims to promote bilateral trade and further strengthen financial cooperation, an objective of mutual interest to both countries.
Bank Indonesia’s Board of Governors decided to hold the BI Rate at a level of 7.25 percent, with rates on the Lending Facility and Deposit Facility held respectively at 7.25 percent and 5.50 percent. Bank Indonesia will continue to monitor global and domestic developments and further synergise the monetary and macroprudential policy mix in order to ensure that inflationary pressures remain under control, that rupiah exchange rate stability is maintained according to its fundamentals and the current account deficit is reduced to a sustainable level.
Although part of the market players on Indonesia's Stock Exchange (IDX) engaged in profit taking after Indonesia's benchmark index (IHSG) climbed for two consecutive days, the index still posted growth of 0.71 percent to 4,418.64 points on Thursday (03/10). Factors that contributed to today's gain were the depreciating US dollar as no solution has been found yet concerning the shutdown, generally rising Asian stock indices and the positive message that is conveyed in the APEC meeting in Bali.
Despite some appetite for profit taking, the key stock index of Indonesia (IHSG) was able to rise 0.96 percent to 4,387.60 points on Wednesday (02/10). The index was supported by the appreciating rupiah, a few rising Asian stock indices and foreign net stock purchases. The Indonesian rupiah rose against the US dollar as the latter was impacted upon by the debt ceiling and shutdown issue in the USA. Asian stock indices were mixed. Concerns about the shutdown were offset by rising Asian currencies against the US dollar.
On this week's second day of trading (01/10), the benchmark stock index of Indonesia (IHSG) was able to post a 0.69 percent rise to 4,345.90 points despite ongoing concerns about the economic shutdown in the United States as discussions have not led to agreement about the country's debt ceiling. However, various data from Asia made a good impact. Indonesia's trade surplus in August and deflation in September contributed to positive market sentiments and provided a boost for the rupiah.
Concerns about the US debt ceiling issue have a negative impact on stock indices around the world, including Indonesia's benchmark stock index (IHSG). Market players fear a possible deadlock during the state budget discussions, which - if not resolved - will have a serious negative impact on the economy. Factors that contributed to negative market sentiments were the continued depreciating value of rupiah and weak openings of European stock indices. The IHSG fell 2.43 percent to 4,316.18 on Monday (30/09).
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