The Indonesian rupiah depreciated sharply, while the country’s stocks fell. According to the Bloomberg Dollar Index, Indonesia’s currency depreciated 0.86 percent to IDR 13,148 per US dollar on Thursday (07/05). This performance was in line with the performance of other Asian currencies. Of the 11 Asian currencies that are followed by Bloomberg, only Japan’s yen appreciated against the US dollar. The Indian rupee was the worst performer today, weakening 1.06 percent against the greenback.

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The Indonesian Automotive Manufacturers Association (Gaikindo) lowered its car sales target for 2015 to 1.1 million vehicles, down from its original sales target of 1.2 million vehicles, due to persistent slowing economic growth in Indonesia (curbing consumer demand). On Tuesday (05/05), Statistics Indonesia announced that the country’s economic growth slowed to 4.71 percent (y/y) in the first quarter of 2015, a five-year low. Other important factors that negatively influence car sales are inflation, the interest rate, the rupiah, and fuel prices.

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Indonesia’s economic growth in the first quarter of 2015 was recorded at 4.71 percent (y/y). Although it had been expected that Indonesia’s GDP growth figure would slip below the five percent mark, the slowdown was worse than initially expected. Suryamin, Head of Statistics Indonesia (BPS), stated earlier today (05/05) that the country’s economic growth slowed to a five-year low on the back of weak exports (the result of reduced economic growth in export markets) and lower crude oil prices.

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After having plummeted about 7 percent over the course of seven trading days, Indonesia’s benchmark Jakarta Composite Index rebounded directly after opening on Monday (04/05). At 10:41 am local Jakarta time, the index had surged 1.30 percent to 5,152.95 points. As Indonesian stocks are generally ‘oversold’ they have become attractive to investors. Moreover, most US and European stock indices ended higher at the end of last week hence providing more fuel for Indonesian stocks to rebound today.

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Indonesian stocks continued to fall today (30/04). After the first trading session, Indonesia’s benchmark Jakarta Composite Index fell 0.11 percent to 5,099.83 points. The index was negatively affected by yesterday’s weakening stock indices in the USA and Europe. These indices experienced a correction due to mixed signals stemming from the latest US Federal Reserve’s FOMC meeting. Contrary to its March policy statement, the Fed did not rule out hiking rates at the next meeting. However, it also downgraded the US growth outlook.

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Indonesian stocks continue to fall on today’s trading day (28/04). After having declined 3.49 percent yesterday, the benchmark Jakarta Composite Index fell a further 1.00 percent during the first trading session on Tuesday. Investors, particularly foreign ones, are still concerned about weak first quarter financial results of listed Indonesian companies, signalling that the country’s economic growth in Q1-2015 will be disappointing too. Furthermore, the market is waiting for results of the Federal Reserve’s two-day policy meeting which is set to start today.

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The benchmark stock index of Indonesia - Jakarta Composite Index (IHSG) - fell sharply on Monday (27/04) amid mixed regional stock markets. Three main factors caused the weak performance of Indonesian stocks. Firstly, several key companies posted weak first quarter corporate earnings. Secondly, Indonesia’s economic growth in the first quarter may fall below 5 percent (y/y), which would be a six-year low. Lastly, Indonesia is getting bad press around the globe due to imminent executions of convicted foreign drug traffickers.

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On 26 April 2015, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as updates on Indonesia’s telecommunications, cement and rubber industries, the performance of the rupiah, the 24th World Economic Forum on East Asia, mutual fund management, and more.

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Over the past week the Indonesian rupiah depreciated 0.60 percent to IDR 12,941 per US dollar (Jakarta Interbank Spot Dollar Rate). At the start of the week the rupiah experienced severe pressure as market participants were concerned about Indonesia’s slowing economic growth. However, in the second half of the week, Indonesia’s currency somewhat improved as the US dollar was negatively affected by weak US economic data. Based on the Bloomberg Dollar Index, the rupiah finished at IDR 12,922 per US dollar on Friday (24/04).

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In line with other Asian emerging market currencies, the Indonesian rupiah is depreciating against the US dollar on Monday’s trading day (20/04). According to the Bloomberg Dollar Index, Indonesia’s currency had depreciated 0.25 percent to IDR 12,882 per US dollar at 13:00 pm local Jakarta time. However, Head of Research at NH Korindo Securities Reza Priyambada believes that the currency cannot depreciate much further as positive economic data provides enough support for the rupiah.

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Contrary to most Asian stock indices which were positively influenced by Japan’s higher economic growth as well as rising indices on Wall Street last Friday (06/06), the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) fell considerably on Monday (09/06). Not even the appreciating Indonesian rupiah exchange rate could push the index back into the green zone. At the end of Monday’s trading day, the Jakarta Composite Index declined 1.06 percent to 4,885.08 points.

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Car sales in Indonesia declined 8 percent to 98,198 units in May 2014 from 106,811 units in the previous month. The Indonesian Automotive Industry Association (Gaikindo) said that the decline was the direct consequence of several public holidays (International Labour Day and the commemorations of Buddha’s birthday as well as ascensions of Prophet Muhammad and Jesus Christ). These holidays caused a lower car production rate and a reduced number of car deliveries to wholesale dealers.

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It was interesting to follow the performance of the benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) on Thursday (05/06) as it managed to enter the green zone just minutes ahead of closing. Most of the trading day, the index had been in the red zone as Asian stock indices were mostly down on concerns about economic growth in China, the world's second largest economy. Furthermore, investors are still cautiously following the recent depreciating trend of the Indonesian rupiah.

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The Indonesian rupiah exchange rate appreciated 0.25 percent to IDR 11,860 per US dollar according to the Bloomberg Dollar Index on Thursday (05/06). However, this is not expected to be the start of an appreciating trend for the currency as there are still various domestic and international factors that place pressure on the rupiah. Contrary to the Bloomberg Index, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.54 percent to IDR 11,874 against the US dollar today.

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Although Indonesian Finance Minister Chatib Basri provided positive news to the market by stating that the country's trade deficit (and co-related current account deficit) will probably not be as large in the second quarter of 2014 (as compared to the same quarter in 2013) as well as an expected increase in Indonesian banks' consumer credit, the benchmark stock index (known as Jakarta Composite Index or IHSG) was unable to rise on Wednesday's trading day (04/06). Particularly local investors were eager to sell their Indonesian shares.

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The Indonesian rupiah exchange rate continued to depreciate further on Wednesday (04/06). According to the Bloomberg Dollar Index, the currency of Indonesia had weakened 0.38 percent to IDR 11,855 per US dollar by 15:00pm local Jakarta time. The depreciation occurred due to US dollar demand from local importers for payments and renewed concern about the country's trade balance. Today's performance of the rupiah is in line with the performance of other Asian currencies as investors return to the US dollar on higher US yields.

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Supported by enthousiastic foreign investors, the benchmark stock index of Indonesia (Jakarta Composite Index or also known as IHSG) managed to climb 0.61 percent to 4,942.16 points on Tuesday (03/06). Particularly consumer, trade and mining stocks were popular on today's trading day. It is interesting to note that this growth happened amid sharp rupiah depreciation as the currency still feels the negative impact of the USD $1.97 billion April 2014 trade deficit that was released yesterday (02/06).

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Although initially the benchmark stock index of Indonesia (known as Jakarta Composite index or IHSG) fell after the market responded to today's release of Indonesia's April trade deficit and May inflation, the index ended in the green zone due to foreign net buying and general positive Asian indices (influenced by higher stock indices on Wall Street at the end of last week). Particularly Indonesia's big cap stocks in the miscellaneous industry and consumer sectors were popular as these were relatively cheap after having tumbled at the end of last week.

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The Indonesian rupiah exchange rate depreciated 0.77 percent to IDR 11,766 per US dollar on Monday (02/06) based on the Bloomberg Dollar Index. From the start of trading the currency of Southeast Asia's largest economy immediately plummeted as market participants anticipated a trade deficit in April 2014. Last Friday, the central bank of Indonesia (Bank Indonesia) announced that it expects Indonesia to post a deficit in April, whereas earlier statements of the central bank had mentioned a slight surplus.

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Asian stocks declined on Friday's trading day (30/05) after a government report showed that the US economy - the world's largest economy - shrank by one percent (year-on-year) in the first quarter of 2014, the country's first contraction since early 2011. The contraction was far worse than the initial forecast at 0.1 percent. The main cause of the contraction was the severe winter that hit the USA. The benchmark stock index of Indonesia (Jakarta Composite Index) fell 1.84 percent to 4,893.91 points on Friday (30/05).

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