Similar to yesterday, Indonesian stocks and the rupiah are still moving cautiously on Thursday (30/07). Supported by yesterday’s rising US stocks and today’s mostly rising stocks in the Asia-Pacific region, the benchmark Jakarta Composite Index climbed 0.22 percent in the first trading session on Thursday. However, the latest statements from the US Federal Reserve also signal that a US interest rate hike is coming closer, hence giving rise to a stronger US dollar at the expense of most global currencies and the gold price.

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Indonesian stocks and the rupiah continued to weaken on the first trading day of the week, especially due to negative global market sentiments. China’s Shanghai Composite Index tumbled a staggering 8.48 percent on Monday (27/07), its worst daily percentage fall since February 2007. Furthermore, Wall Street closed broadly lower on Friday (24/07) for the fourth straight day. Meanwhile, the Indonesian rupiah continued to depreciate against the US dollar, making Indonesian assets unattractive to foreign investors.

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Indonesia’s decision to raise import tariffs for food, cars, clothes as well as various other consumer goods put additional downward pressure on Indonesian stocks on the last trading day of the week (24/07). Those listed companies (retailers) that rely on imported goods saw their shares tumble as a consequence of the higher import tariffs. The Indonesian Finance Ministry raised import duties for consumer goods between 10 and 150 percent (depending on product) in a bid to boost the country’s consumer goods industry and curtail imports.

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It is expected to be another difficult day for Indonesian stocks and the rupiah as there are few to none positive market sentiments that can support these assets on today’s trading day. Wall Street closed lower on Thursday (23/07) for the third consecutive day on disappointing financial results of several big companies, dragging down indices in the East. Commodity indices continue to fall (oil returning to bear market on resilient US output and rising OPEC supply). Meanwhile, sharp rupiah depreciation makes investors nervous.

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Again, Indonesia’s rupiah is touching the IDR 13,400 per US dollar psychological boundary. According to the Bloomberg Dollar Index, Indonesia’s currency had depreciated 0.22 percent to IDR 13,405 per US dollar at 11:22 am local Jakarta time on Thursday (23/07), a level last seen when the country was still plagued by the Asian Financial Crisis in 1998. Crossing the psychological boundary could mean Indonesia’s central bank (Bank Indonesia) will intervene again to support the currency in order to safeguard people’s confidence in the currency.

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Stock trading at the Indonesia Stock Exchange (IDX) restarted on Wednesday (22/07) after the four-day Idul Fitri holiday ended. Shortly after opening on Wednesday, Indonesia’s benchmark Jakarta Composite Index (IHSG) rose 0.50 percent on investors’ optimism about the recent good performance of global stock markets after debt-ridden Greece reached an agreement with its international creditors while turmoil in Chinese stocks faded. Not long after opening, however, Indonesian shares were dragged down by other Asian indices.

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According to the Bloomberg Dollar Index, the Indonesian rupiah continued to depreciate on Monday (20/07). Indonesia’s currency weakened 0.31 percent to IDR 13,395 per US dollar, its weakest level since 1998 when the country was plagued by the Asian Financial Crisis. Meanwhile, Bank Indonesia’s activities are still limited until Wednesday (22/07) due to a public holiday (Idul Fitri celebrations), implying that the central bank temporarily doesn't publish its Jakarta Interbank Spot Dollar Rate (abbreviated: JISDOR).

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In line with the global trend, Indonesian stocks extended their gains on Tuesday morning (14/07). Most stock indices (across the globe) continue to move in green territory after debt-ridden Greece and its international creditors agreed - after a 17-hour long emergency meeting - to an austerity package that will keep Greece within the Eurozone. Indonesia’s benchmark Jakarta Composite Index (IHSG) had risen 0.60 percent to 4,923.36 points by 11:45 am local Jakarta time on Tuesday.

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Most analysts agree that the central bank of Indonesia (Bank Indonesia) will leave its interest rate regime unchanged at the Board of Governors’ Meeting that is scheduled for Tuesday 14 July 2015. Indonesia’s central bank is expected to maintain its key interest rate (BI rate) at 7.50 percent, the overnight deposit facility rate (Fasbi) at 5.50 percent, and the lending facility rate at 8.00 percent as the country’s inflation rate has recently accelerated while the rupiah has been under pressure due to external factors.

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Indonesian stocks and the rupiah weakened further on Wednesday (08/07) due to the continuing fall of Chinese stocks (raising concerns about global economic growth) and the downward revision of the World Bank and Asian Development Bank (ADB)’s economic growth forecasts for Indonesia in 2015. Furthermore, global uncertainty brought about by the looming Greek exit (Grexit) from the euro continues to plague markets worldwide and makes investors prefer to wait for more certain times.

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On Tuesday (08/07), both the Indonesian rupiah exchange rate and stocks continued where they left off yesterday. Supported by optimistic market participants speculating on a Joko Widodo victory in Wednesday’s presidential election, the rupiah appreciated 0.74 percent to IDR 11,626 per US dollar based on the Bloomberg Dollar Index, while the country’s benchmark stock index (Jakarta Composite Index) rose 0.72 percent to 5,024.71 points, surpassing the psychological level at 5,000 and approaching its record high level at 5,215 (21 March 2013).

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Although Asian stock indices tended to decline on Monday’s trading day (07/07) due to profit taking amid expectation that corporate earnings in the first half of 2014 are disappointing, the benchmark stock index of Indonesia (known as Jakarta Composite Index or IHSG) performed remarkably well as foreign investors recorded net buying and the Indonesian rupiah exchange rate appreciated sharply. The main reason why markets were positive in Indonesia on Monday was the strong performance of Joko Widodo in Saturday’s presidential debate.

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The Indonesian rupiah exchange rate appreciated sharply on Monday (07/07) due to the strong performance of presidential candidate Joko Widodo (Jokowi) in the presidential debate with rival candidate Prabowo Subianto last Saturday evening. Indonesian media declared Jokowi the winner of the debate because of his confident, eloquent and well-structured performance. This debate, in which the candidates were joined by their running mates, was the fifth and final one ahead of the presidential election on Wednesday 9 July.

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Emerging currencies in Asia, led by the Indonesian rupiah exchange rate, strengthened in the past week on positive economic data from the US and China, the world’s two largest economies. Companies in the US added more jobs than expected in June 2014, while manufacturing in China grew at its fastest pace in 2014. Improving economies of the US and China are important for Asian countries as it boosts Asian exports. Moreover, Indonesian inflation and trade data contributed to positive market sentiments.

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The Indonesian rupiah exchange rate depreciated slightly on Thursday (03/07). The US dollar gained as markets reacted to Wednesday’s ADP nonfarm payrolls report which showed that 281,000 jobs were added in the US private sector in June 2014, thus exceeding expectations. Furthermore, the market is optimistic that US employment data, released later today, will be positive too. According to the Bloomberg Dollar Index, the currency of Indonesia depreciated 0.04 percent to IDR 11,918 per US dollar.

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Although the benchmark stock index of Indonesia (known as Jakarta Composite Index or IHSG) was in the red zone prior to the release of Indonesia’s June inflation figure and May trade data, at the end of the day it finished slightly in the green zone. The IHSG climbed 0.13 percent to 4,884.83 points. The macroeconomic data that were released were positive and made market participants engage in stock trading. Moreover, the index was supported by Asian stock markets that were mostly up as well as the appreciating rupiah exchange rate.

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The Indonesian rupiah exchange rate is appreciating sharply on Monday (30/06). By 15:13pm local Jakarta time, the currency of Indonesia had strengthened 1.31 percent to IDR 11,838 against the US dollar. Main factors that cause this performance are the weakening US dollar (as a slowdown in the US economic recovery evokes expectations that the Fed Rate will not be raised soon) and falling oil prices; the US benchmark West Texas Intermediate declined 30 cents to USD $105.44 in mid-morning trade while Brent crude fell 22 cents to USD $113.08.

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The Indonesian rupiah exchange rate depreciated 0.07 percent to IDR 12,099 per US dollar on Thursday (26/06) based on the Bloomberg Dollar Index, thus extending its recent weakening trend. This trend is expected to continue further as Bank Indonesia said it would allow rupiah depreciation in order to make the country’s exports more competitive (in an attempt to curb the current account deficit). However, this also dampens demand for Indonesian bonds. The 10-year yield rose to the highest level since February 2014.

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The Indonesian rupiah exchange rate depreciated considerably on Wednesday (25/06) after Indonesia’s central bank (Bank Indonesia) said it would allow rupiah depreciation in an attempt to boost competitiveness of the country’s exports, while curbing imports. This strategy will have a positive impact on the country’s troubled trade balance. Based on the Bloomberg Dollar Index, the currency had weakened 0.67 percent to IDR 12,070 per US dollar by 14:30pm local Jakarta time.

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The Indonesia rupiah exchange rate depreciated 0.16 percent to IDR 11,992 per US dollar on Monday (23/06) according to the Bloomberg Dollar Index, thus extending the currency’s recent depreciating trend. Meanwhile, Bank Indonesia's benchmark rupiah rate (known as the Jakarta Interbank Spot Dollar Rate, or, abbreviated JISDOR) depreciated 0.03 percent to IDR 11,971 against the greenback. What were the factors that influenced the rupiah’s performance today?

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