Below is a list with tagged columns and company profiles.

Today's Headlines Rupiah

  • Impact of the Weak Rupiah on Indonesia's Food & Drink Industry

    Impact of the Weak Rupiah on Indonesia's Food & Drink Industry

    In theory the weak rupiah makes Indonesian export products more competitive on the global market. However, when the content of those export products contain a high degree of imported raw materials, then the positive effect of a weak rupiah is disabled. And the situation is similarly complicated for those companies that import a high degree of raw materials to make products that are sold on the domestic market. They could of course simply raise retail prices. However, the consequence is that demand for the products could drop.

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  • Indonesia's Foreign Exchange Reserves Tumble for 5th Straight Month

    Indonesia's Foreign Exchange Reserves Tumble for 5th Straight Month

    The central bank of Indonesia (Bank Indonesia) announced that the nation's foreign exchange reserves had fallen to USD $119.8 billion (per end June 2018), thus declining USD $3.1 billion compared to the position in the preceding month. As such, the recent trend continued: Indonesia's foreign exchange assets have now fallen for five straight months after touching a record high of nearly USD $132.0 billion in January 2018 (see table below).

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  • Gauge of Market Fear: Indonesia's Credit Default Swap Rising

    Gauge of Market Fear: Indonesia's Credit Default Swap Rising

    Risk perceptions on Indonesian debt have risen amid concerns over the fragile rupiah. So far in 2018 the Indonesian rupiah has depreciated around 6 percent against the US dollar due to US monetary tightening and simmering concerns over the outbreak of a global trade war. Waning risk perception is reflected by the rising credit default swap (CDS) of the five-year Indonesian bond.

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  • Currency of Indonesia: Rupiah Finding a New Equilibrium Rate?

    Currency of Indonesia: Rupiah Finding a New Equilibrium Rate?

    The central bank of Indonesia (Bank Indonesia) hiked its benchmark interest rate three times over the past six weeks - by a total of 1.00 percent to take the benchmark to the level of 5.25 percent - in order to defend the rupiah. Last Friday (27/06) Bank Indonesia surprised part of the market by implementing a 0.50 percent rate hike. As a result, the rupiah strengthened markedly. However, its impact on the rupiah performance seems very temporary. This week the rupiah is again depreciating, hovering around the IDR 14,400 per US dollar level.

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  • Bank Indonesia Raises Key Interest Rate by 50 bps to 5.25%

    Bank Indonesia Raises Key Interest Rate by 50 bps to 5.25%

    As we had predicted this morning, Bank Indonesia decided to raise its benchmark interest rate by 50 basis points (bps) to 5.25 percent at the two-day June policy meeting that was concluded earlier today. Presumably markets had been expecting a 25 bps rate hike (therefore being priced in already) and therefore the central bank of Indonesia possibly felt it had to take a more aggressive approach to defend the Indonesian rupiah that had weakened beyond the IDR 14,400 per US dollar level.

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  • Market Participants Await Bank Indonesia's Policy Decision

    Market Participants Await Bank Indonesia's Policy Decision

    The Indonesian rupiah continues to slide on Friday (29/06) and is now hovering around the IDR 14,400 per US dollar level. The weak rupiah reaffirms analysts' expectations of seeing another interest rate hike. Today, the central bank of Indonesia (Bank Indonesia) will conclude its June policy meeting. But perhaps the crucial question is not "will Bank Indonesia raise its benchmark rate?" Possibly the more crucial questions are "by how much will it raise its rate?" and "what other policies will it implement to strengthen rupiah stability as well as financial stability?"

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  • Stocks & Currency Update Indonesia: Jakarta Composite Index & Rupiah

    Stocks & Currency Update Indonesia: Jakarta Composite Index & Rupiah

    Asian stocks and emerging market currencies continue to be under pressure on Thursday morning (28/06) amid uncertainty regarding US authorities' stance on Chinese investment in US tech companies, ongoing concerns over the impact of simmering global trade woes on economic growth, and rising crude oil prices. However, as we approach the lunch break there are some signs of a rebound in Asian markets.

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  • Indonesia's Jakarta Composite Index Resumes Trading in Red Territory

    Indonesia's Jakarta Composite Index Resumes Trading in Red Territory

    While Asian markets are mixed on Wednesday morning (20/06), Indonesia's benchmark Jakarta Composite Index plunged 2 percent (to a four-week low) in the first five minutes after trading resumed after the long Eid al-Fitr holiday. Indeed a lot happened on the global stage since Indonesian markets closed on Friday 8 June 2018 that has not been absorbed by Indonesian assets. Therefore, today it is catch-up day for investors.

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  • Bank Indonesia Raises Key Interest Rate in Unscheduled Meeting

    Bank Indonesia Raises Key Interest Rate in Unscheduled Meeting

    In line with expectations the central bank of Indonesia (Bank Indonesia) raised its benchmark interest rate - the BI seven-day reverse repo rate - by 25 basis points to 4.75 percent in an unscheduled meeting on Wednesday (30/05). In combination with the scheduled monthly policy meeting on 16-17 May 2018, Bank Indonesia raised the benchmark interest rate by a total of 0.50 percent this month.

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  • Indonesian Stocks Soar, Bank Indonesia Inaugurates New Governor

    Indonesian Stocks Soar, Bank Indonesia Inaugurates New Governor

    While most Asian shares are in red territory amid some risk aversion, Indonesia's benchmark Jakarta Composite Index is skyrocketing on Thursday (24/05). In the first trading session of the day the benchmark index of Indonesia soared 2.39 percent to 5,930.13 points as foreigners are back to enjoy bargain hunting (before the start of trading today, the Jakarta Composite Index had weakened nearly 9 percent since the year-start).

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Latest Columns Rupiah

  • Performance of the Indonesian Rupiah & Stocks in the Past Week

    Performance of the Indonesian Rupiah & Stocks in the Past Week

    Amid political uncertainty and a looming increase in US interest rates, Indonesian stocks and the rupiah exchange rate weakened considerably in the past week. Market participants are increasingly concerned about the situation in Indonesia’s parliament where a majority of political parties - named the Merah-Putih coalition (led by defeated presidential candidate Prabowo Subianto) - is expected to undermine president-elect Joko Widodo’s reform programs as well as the democratic foundations of the country.

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  • Stock Market Update Indonesia: Down on Politics and Global Data

    Indonesian stocks plunged considerably on Thursday (02/10). The country’s benchmark stock index (Jakarta Composite Index, abbreviated IHSG) declined 2.73 percent to 5,000.81 points, the largest drop in almost six months. This poor performance was caused by both external and internal factors. Externally, various weak economic data from the USA and Europe as well as an appreciating yen impacted negatively on Asian stock indices. Internally, market participants responded negatively toward the inauguration of the new parliament.

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  • Update Indonesian Rupiah & Stocks: Stronger on Economic Data

    Although Indonesia’s September 2014 inflation (0.27 percent m/m) and appreciating rupiah exchange rate had a positive impact on the performance of Indonesia’s benchmark stock index (Jakarta Composite Index, abbreviated IHSG) on Wednesday (01/10), its gain was limited by declining indices on Wall Street on the previous day as well as Indonesia’s August trade deficit (USD $318.1 million), which resulted in foreign net selling of worth IDR 388 billion of Indonesian stocks. The IHSG climbed 0.06 percent to 5,140.91 points.

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  • Despite Sharp Rupiah Depreciation, Indonesian Stocks Rise 0.18%

    The benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) rose 0.18 percent to 5,142.01 points on Monday (29/09) despite the sharp depreciation of the Indonesian rupiah exchange rate. Possibly market participants took advantage of relatively cheap blue chip stocks after the 1.3 percent drop on Friday (26/09) caused by negative market sentiments brought about by the parliament’s passing of a bill which abolishes direct voting of regional leaders. Foreign investors recorded net selling of IDR 542.4 billion.

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  • Stocks & Rupiah Update Indonesia: Performance Today

    Stocks & Rupiah Update Indonesia: Performance Today

    In line with the trend on other Asian stock indices, the benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) fell on Monday (22/09) amid profit taking after three days of gains. Not even the appreciating rupiah exchange rate and net buying of foreign investors (IDR 26.6 billion) were able to push Indonesia’s index into the green zone. The IHSG declined 0.15 percent to 5,219.80 points. All sectors on the Indonesia Stock Exchange (IDX) fell except for the consumer goods and finance sectors.

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  • Update Indonesian Stocks: Rising on Fed Speculation & Chinese Stimulus

    The benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) closed 1.12 percent higher on Wednesday (17/09) supported by Tuesday’s positive stock indices on Wall Street as well as speculation that the US Federal Reserve will not raise its key interest rate yet. Today (17/09), the Federal Reserve will conclude its Federal Open Market Committee (FOMC) meeting. Lastly, after weak economic data, it was reported that China’s central bank (PBOC) injected USD $82 billion into the country's five largest banks.

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  • Stocks & Rupiah Update Indonesia: Experiencing External Pressure

    Stock markets in the Asia Pacific were down on Tuesday (16/09) as investors are awaiting the results of the Federal Open Market Committee (FOMC) today (Wednesday 17/09) and are focused on the condition of the Chinese economy. Moreover, investors were disappointed to hear that next Indonesian President Joko Widodo (Jokowi) will appoint 16 party politicians to lead ministries in his cabinet (which is in contrast with his initial plan to appoint technocrats). Lastly, the Indonesian rupiah exchange continued to depreciate.

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  • Update Indonesian Rupiah Exchange Rate Performance

    Update Indonesian Rupiah Exchange Rate Performance

    The Indonesian rupiah exchange rate depreciated 0.54 percent to IDR 11,822 per US dollar in the past week (based on the Bloomberg Dollar Index). Several internal and external factors influenced the currency’s performance over the past week, such as increased US dollar demand from local Indonesian companies, Bank Indonesia’s decision to leave the BI rate unchanged and the improving US economy. Lastly, the structural current account deficit (triggered by expensive oil imports) remains a problem for investors.

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  • Bank Indonesia Keeps Key Interest Rate at 7.50% in September 2014

    Bank Indonesia Keeps Key Interest Rate at 7.50% in September 2014

    The central bank of Indonesia (Bank Indonesia) kept its key interest rate (BI rate) at 7.50 percent for the tenth consecutive month as inflation is under control and well within the year-end target of the central bank (3.5-5.5 percent). The lending facility and deposit facility were kept at 7.50 percent and 5.75 percent, respectively, at Thursday’s Board of Governor’s Meeting (11/09). The central bank also expects that the current interest rate environment is capable of curbing the country’s wide current account deficit.

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  • Indonesian Rupiah and Stocks Update: Profit Taking Causes Falling Index

    The benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) declined 0.92 percent to 5,136.86 points on the last trading day of the week. Seven of the ten sectorial indices fell, led by the finance sector (-1.66 percent), followed by consumer goods (-1.50 percent) and manufacturing (-1.34 percent). The main reason for this poor performance is that investors are again looking at the true fundamentals of the Indonesian economy instead of optimism about Joko Widodo becoming Indonesia’s seventh president.

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