As was widely expected by markets, the Federal Reserve raised its key interest rate to the range of 1.50 - 1.75 percent, which is the highest level since 2008, at the March 2018 monthly policy meeting on Wednesday (21/03). The rate hike was already priced in as few expected a different decision, hence most Southeast Asian stock indexes are up on Thursday (22/03), including Indonesia's benchmark Jakarta Composite Index that rose 0.19 percent to 6,324.78 points in the first trading session.

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Although the fundamentals of the Indonesian economy are sound, credit rating agency Standard & Poor's Global Ratings (S&P) warned that there are several threats. These threats include four Fed Funds Rate hikes in 2018, a fragile rupiah, a looming higher benchmark interest rate in Indonesia (BI 7-day Reverse Repo), sluggish household consumption growth, a shift of focus from reforms to elections, the impact of a global trade war, and a deterioration in the balance sheets of certain state-owned enterprises (SOEs).

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Rapidly rising US stock futures and a sell-off in the bond market. These are the results of an impressive US jobs report, released by the US Labor Department on Friday morning (American time) or evening (Indonesian time). The US economy added 313,000 jobs in February 2018, the highest increase since October 2015. A huge rise in construction jobs was one of the key supporting factors. Meanwhile, the US unemployment rate stayed at 4.1 percent for a 5th straight month.

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Based on the Bloomberg Dollar Index the value of the Indonesian rupiah weakened 0.41 percent to IDR 13,816 per US dollar on Thursday (08/03), the currency's weakest position since January 2016, ahead of the release of US non-farm payrolls and US employment data due on Friday (09/03). These data are expected to be strong and therefore pave the way for another Fed Funds Rate hike in March 2018.

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Indonesia's foreign exchange reserves fell from a record high of USD $131.98 billion at the end of January 2018 to USD $128.06 billion at the end of February 2018. In a statement released on its official website, the central bank of Indonesia (Bank Indonesia) attributed the decline in reserve assets is to the use of foreign exchange to repay government external debt as well as efforts to stabilize the Indonesian rupiah exchange rate.

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Based on the Bloomberg Dollar Index the Indonesian rupiah depreciated 0.53 percent to IDR 13,751 per US dollar on Wednesday (28/02), the weakest level against the greenback in slightly over two years. The weakening of the rupiah is in line with the performance of most other currencies as the US dollar is at a three-week high after Federal Reserve Chairman Jerome Powell struck a hawkish tone in his first congressional testimony.

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The central bank of Indonesia (Bank Indonesia) is expected to leave its interest rates regime unchanged at the monthly policy meeting in February (14-15 February 2018) amid (expectations of) tighter monetary policies in the United States (USA), European Union (EU) and Japan.

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Over the past two weeks the Indonesian rupiah depreciated significantly, passing beyond the IDR 13,600 per US dollar level. Also on Monday (12/02) rupiah weakening continued albeit very limited. By 15:25 pm local Jakarta time the currency of Indonesia had weakened 0.05 percent to IDR 13,635 per US dollar (Bloomberg Dollar Index).

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Overnight, the Dow Jones Industrial Average experienced another correction, in fact: a brutal sell-off. After Monday's heavy losses, the Dow Jones plunged 4.15 percent to 23,860 points on Thursday (08/02). Besides the Dow Jones, the S&P 500 has also entered "correction territory" (having fallen over ten percent since their January highs). The mini correction that we saw on Tuesday may have been the eye in the storm only.

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The benchmark Jakarta Composite Index of Indonesia - Jakarta Composite Index - rebounded 0.46 percent to 6,605.63 points on Wednesday (31/01) after the heavy 1.57 percent drop on the preceding day when Asian stock markets were dragged down by Wall Street and rising global bond yields.

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After a real roller coaster ride, Indonesia’s benchmark stock index (Jakarta Composite Index) climbed 0.35 percent to 4,446.20 points at the end of the trading week. The majority of key stock indices across the globe tended to strengthen on Friday after a week characterized by severe volatility amid concern about the economic situation in China.

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During Bank Indonesia’s Board of Governors it was decided on 18th August 2015 to hold the BI Rate at 7.50 percent, while maintaining the Deposit Facility rate at 5.50 percent and the Lending Facility rate at 8.00 percent. The decision is consonant with efforts to control inflation within the target corridor of 4±1 percent in 2015 and 2016. In the short term, Bank Indonesia (BI) is focused on efforts to stabilize the rupiah amid uncertainty in the global economy, by optimizing monetary operations in the rupiah and the foreign exchange market.

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For most of this year, the financial media has held a generally positive tone. There have been some exceptions in cases like the Eurozone which is still mired in a deeply divided sovereign debt crisis. But for most of the world, 2015 has been a positive period in terms of general growth in their broad trends. So it might be easy for macro investors to assume that most markets are currently establishing themselves in the bullish direction.

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For most of this year, the Indonesian rupiah has met selling pressure against the US Dollar. Year-to-date price activity in the USD/IDR shows a rise from below IDR 12,250 to new highs above IDR 13,330 per US dollar. For Indonesian export companies, this is great news as it means that their products will be cheaper for foreign consumers to buy. For the domestic economy, this creates a different set of implications as it also makes it less likely that foreign investors will be looking to buy into Indonesian assets.

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Sejak akhir 2011 Indonesia telah dibebani oleh defisit transaksi berjalan struktural yang menguatirkan baik para pembuat kebijakan maupun para investor (asing). Meskipun pihak berwenang di Indonesia telah mengimplementasikan reformasi kebijakan dan penyesuaian perekonomian di beberapa tahun terakhir, defisit transaksi berjalan Indonesia hanya sedikit berubah di 2015. Baik Bank Dunia maupun Bank Indonesia memprediksi bahwa defisit transaksi berjalan akan tetap berada sedikit di bawah 3% dari produk domestik bruto (PDB) di 2015, sangat dekat dengan batasan yang memisahkan defisit yang sustainable dan yang unsustainable.

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Kalau kita memperhatikan aktivitas jangka panjang rupiah, kita telah melihat kekuatan yang mengejutkan dalam aktivitas beberapa bulan terakhir. Hal ini mengejutkan karena beberapa alasan yang berbeda dan tidak serupa dengan keadaan pasar negara berkembang lain di Asia. Secara esensial ini menyarankan bahwa aktivitas perekonomian di wilayah ini telah agak kurang berhubungan dan bahwa trend yang tampak di satu negara tidak bisa diprediksi sama di negara lain. Namun ketika kita melihat grafik aktivitas di rupiah sendiri, kita bisa melihat trend secara umum telah mulai berubah di dua bulan terakhir.

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Both Indonesian stocks and the rupiah continued to slide on Thursday (04/06) and seem to be caught in a vicious downward spiral brought about by both domestic and international factors. Indonesia’s benchmark stock index (Jakarta Composite Index) fell 0.68 percent to close at a five-week low of 5,095.82 points, while the rupiah depreciated 0.39 percent to IDR 13,281 per US dollar (Bloomberg Dollar Index), a level last seen in the late 1990s when the country was plagued by the Asian Financial Crisis.

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Most stock markets and currencies in Southeast Asia weakened on Friday (29/05), including Indonesia’s benchmark Jakarta Composite Index and the rupiah. The Jakarta Composite Index fell 0.40 percent to 5,216.38 points, while the rupiah depreciated 0.01 percent to IDR 13,224 per US dollar according to the Bloomberg Dollar Index. Over the past week, Indonesian stocks and the rupiah weakened primarily due to the Greek debt crisis, looming higher US interest rates and the lack of positive domestic factors.

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Selama setahun terakhir, rupiah telah menguat terhadap berbagai jenis mata uang asing. Namun penguatan ini tidak berlaku terhadap dollar Amerika Serikat (AS). Pada periode waktu yang sama, rupiah menguat terhadap mata uang asing lainnya dan sebaliknya rupiah melemah terhadap dollar AS. Untuk banyak investor yang berfokus pada pasar mata uang, mungkin tampaknya seakan dua mata uang ini hanya sedikit berhubungan. Namun, kalau kita melihat trend yang berkembang selama setahun terakhir, menjadi jelas bahwa keadaannya tidak seperti itu.

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Pasar saham di Indonesia telah menjadi sangat tidak stabil dalam minggu-minggu terakhir, dan ini telah membuat banyak investor menduga-duga apakah rally yang dimulai pada Oktober lalu masih dapat bertahan dan bisa dilanjutkan. Minggu lalu, MSCI Indonesia Index (yang diperdagangkan dengan simbol saham EIDO) mengalami kejatuhan besar - dari posisi yang jauh di atas batas 6.500 menjadi di bawah batas 6.000. Dari perspektif persentase, gerakan seperti ini bisa menyebabkan kerugian yang signifikan untuk mereka yang membeli saham-saham Indonesia saat harganya masih ada pada level tingkat atas.

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