Agus Martowardojo, the governor of Indonesia's central bank (Bank Indonesia), provided some new forecasts with regard to Indonesia's economic growth and rupiah. On Tuesday (06/06) Martowardojo told at a parliamentary hearing that he expects the rupiah to depreciate modestly in 2018, while economic growth should accelerate. Meanwhile, Indonesian Finance Minister Sri Mulyani Indrawati said Indonesia's state budget deficit is estimated to widen slightly more-than-expected in 2017.

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On early Monday morning we detect light trading in Asian stock markets. This is mainly because markets in the USA, United Kingdom and China are closed for a public holiday today (29/05), while investors are also awaiting speeches from Federal Reserve and European Central Bank (ECB) officials as well as the US jobs report (due on 2 June). Meanwhile, North Korea again caused rising tensions as it launched another ballistic missile in its latest test.

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Most Asian stocks are in the green zone on Monday morning (22/05), tracking Wall Street's performance on Friday where investors' attention shifted from recent political drama - related to US President Donald Trump - to good corporate earnings of Deere and Caterpillar. Meanwhile, rising crude oil ahead of the OPEC meeting on Friday (May 25, 2017) added positive sentiments to markets. Indonesia is again on track to finish at a new all-time record high.

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It is not a good day for stocks across the Asia-Pacific today. After US stocks on Wall Street tumbled overnight on persistent concerns about political stability in the USA - as President Donald Trump allegedly tried to interfere in a federal investigation by urging former FBI chief James Comey to end a probe into former National Security Adviser Michael Flynn's ties with Russia - Asian stocks are following suit on Thursday (18/05).

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Indonesia's benchmark Jakarta Composite Index fell 0.56 percent to 5,615.49 points on Wednesday (17/05), in line with the performance of stocks across the Asia-Pacific region. The weak performance is caused by increasing concern about the controversial actions and policies of US President Donald Trump. After the emergence of several new scandals over the past couple of days more and more people assume Trump will not be able to finish his presidential term as calls for impeachment are heard.

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Starting from March 5, 2018, Indonesian citizens as well as foreigners need to be a bit more careful when bringing foreign-denominated cash money into Indonesia. A new Bank Indonesia regulation sets a IDR 1 billion (approx. USD $75,000) ceiling on the total amount of foreign cash money an individual can bring into Indonesia.

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Sugeng, Deputy Governor of Indonesia's central bank (Bank Indonesia),  confirmed on Monday morning (08/05) that his institution has recently been intervening in the foreign exchange market in an effort to limit sharp rupiah appreciation. So far in 2017 the Indonesian rupiah has appreciated 1.11 percent against the US dollar with most of the rupiah's advance stemming from the first month of the year.

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As widely expected, the Federal Reserve kept its benchmark interest rate unchanged after May's two-day policy meeting that was concluded on Wednesday (03/05). The US central bank also delivered a rather hawkish policy statement, downplaying weak Q1-2017 economic growth and emphasizing the strength of the US labor market. This implies the Fed is still on track for two more rate hikes in the remainder of 2017.

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Yesterday's Jakarta gubernatorial election seems to have little impact on the performance of Indonesian stocks and the rupiah today (20/04). While Indonesia's benchmark Jakarta Composite Index is cautiously higher (in line with the general trend of Asian stocks this morning), the Indonesian rupiah had depreciated 0.10 percent to IDR 13,332 per US dollar (Bloomberg Dollar Index) by 10:00 am local Jakarta time on Thursday (20/04). The rupiah performance is slightly out of tune with most other Asian currencies but its weakening is still rather insignificant.

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It was a good day for Indonesian stocks on Wednesday (29/03) as the nation's benchmark Jakarta Composite Index (IHSG) hit a new record high at 5.592.51 points, one day after Indonesian markets had been closed for a public holiday. Not only Indonesia but most Asian stocks rose on Wednesday - in line with expectations - following Wall Street higher overnight where the Trump stock rally seems back on track, especially after positive new economic data.

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Falling stock indices on Wall Street on Wednesday (04/12) impacted on Asia the following day resulting in the majority of Asian indices being down on Thursday's trading day (05/12), including the benchmark stock index of Indonesia (IHSG). Besides the impact of Wall Street, Asian stock markets are also vulnerable to ongoing concern about the future of the Federal Reserve's quantitative easing program. In the case of Indonesia, negative market sentiments are intensified by the continued depreciation of the rupiah exchange rate.

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In the morning of Thursday (05/12), Indonesia's rupiah exchange rate depreciated beyond the psychological level of IDR 12,000 per US dollar. In the Bloomberg Dollar Index, the rupiah fell 0.2 percent to IDR 12,011 as of 09:19:49. The main factor behind this decline is market participants' concerns about the end of the Federal Reserve's monthly USD $85 billion bond buying program. It is increasingly speculated that the winding down of this program will start sooner than expected.

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The continued presence of negative market sentiments made it impossible for Indonesia's Jakarta Composite Index (IHSG) to rebound. The looming end of the FED's quantitative easing program - which may be wound down sooner than expected - is a big cause for concern. The depreciating Indonesia rupiah exchange rate intensifies these concerns, particularly regarding companies that have exposure to volatile US dollar movements. Furthermore, investors are waiting for further US economic data as well as for Bank Indonesia's next meeting.

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Apparently positive market sentiments brought on by the macroeconomic data released on Monday (02/12) did not last long. Yesterday, Indonesia's benchmark stock index (IHSG) was lifted by the October 2013 trade surplus and limited November inflation. However, investors are now back to reality and prefer to wait for results of Bank Indonesia's Board of Governor's meeting (12/12) and the Federal Reserve's FOMC meeting (17-18/12). The former will inform about Indonesia's interest rate, the latter about the future of quantitative easing.

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The inflation rate of Indonesia rose slightly in November 2013 (month-to-month) and confirms estimations that inflation in Southeast Asia's largest economy is under control after having accelerated sharply due to the introduction of higher subsidized fuel prices June 2013. In recent months, inflation moved sideways and is expected to ease considerably in the first quarter of 2014. Indonesia's consumer price index rose 0.12 percent in November due to rising electricity, processed foods and health care costs.

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Although widespread concerns about Indonesia's prolonged trade deficit (and current account deficit) are far from unfounded, the country's October 2013 trade data show a positive result. On Monday (02/12), Statistics Indonesia announced that Southeast Asia's largest economy posted a small trade surplus of USD $42.4 million in October after having recorded a trade deficit of USD $810 million in the previous month. This calender year (January to October 2013), the trade deficit has accumulated to USD $6.36 billion.

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The benchmark stock index of Indonesia (known as the Jakarta Composite index or IHSG) was able to continue its rise on Monday (02/12), supported by economic data released by Statistics Indonesia. Although Indonesia's November inflation rate (0.12 percent) was slightly higher than previously expected, investors were content with the result. Moreover, Indonesia's October trade balance showed a (limited) surplus of USD $42.2 million, constituting a sharp improvement from the large deficit in the previous month.

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After five consecutive days of depreciation, the Indonesian rupiah exchange rate finally managed to strengthen against the US dollar. Bank Indonesia's Jakarta Interbank Spot Dollar Rate rose 0.26 percent to IDR 11,946 per US dollar on Monday (02/12). According to Bloomberg data, the rupiah rose 1.85 percent to IDR 11,744 as of 02:25:50 ET as market participants have reacted positively to Indonesian trade and inflation data that were released today: October showed a trade surplus, while in November inflation was kept at 0.12 percent.

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The Jakarta Composite Index (Indonesia's benchmark stock index which is also known as the IHSG) gained 0.53 percent on Friday (29/11) and ended on 4,256.43 points. Today's trading day was relatively quiet with a transaction value of only IDR 3.30 trillion (USD $276.50 million). Foreign net buying of Indonesian shares supported the IHSG index to end this month's last trading day on a positive note. Sectors that performed well were agriculture (+2.18 percent), construction (+1.27 percent), and mining (+0.99 percent).

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On Friday (29/11), the last trading day of November 2013, the Indonesian rupiah exchange rate continued its downward spiral. The Jakarta Interbank Spot Dollar Rate¹ fell 0.39 percent to IDR 11,970 per US dollar amid concern about the winding down of the quantitative easing program, Indonesia's wide current account deficit, a disappointing US dollar-denominated bond auction and surging US dollar demand for earnings repatriation as well as foreign debt payment. Considering the full month of November, the rupiah depreciated 6.61 percent.

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