The central bank of Indonesia (Bank Indonesia) announced on Friday (14/08) that the country’s current account deficit narrowed to USD $4.48 billion, or 2.1 percent of gross domestic product (GDP), in the second quarter of 2015. In the same quarter last year the deficit stood at USD $9.59 billion). As such, the current account deficit (CAD) has become more sustainable and this may provide some support for the rupiah which is currently facing tough times (ahead of a looming US interest rate and China’s yuan devaluation).

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The Indonesian rupiah continues to depreciate on Tuesday (11/08). By 11:16 am local Jakarta time, the rupiah had depreciated 0.14 percent to IDR 13,570 per US dollar according to the Bloomberg Dollar Index. Indonesia’s currency has been touching 17-year lows due to bullish US dollar momentum ahead of looming higher US interest rates. Today, the US dollar received additional strength as China allowed its currency to weaken to a three-year low, dragging down other currencies in the Asian region.

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Stock markets in Asia are mixed on Monday (10/08) with Indonesian stocks heading downwards. In the first trading session, Indonesia’s benchmark stock market (Jakarta Composite Index) fell 0.99 percent to 4,723.19 points on weak trade data from China and positive labor data from the USA. Meanwhile, Indonesia’s rupiah is moving sideways. At 13:12 pm local Jakarta time, the rupiah was still at IDR 13,541 per US dollar according to the Bloomberg Dollar Index, unchanged since the opening this morning.

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The Indonesian rupiah continued to depreciate on Friday (07/08). Based on the Bloomberg Dollar Index, Indonesia’s currency depreciated 0.09 percent to IDR 13,541 per US dollar on the last trading day of the week. As such, the rupiah continued to flirt with a 17-year low. With US nonfarm payrolls expected to improve at a steady pace, implying that an US interest rate hike may come sooner than later, the US dollar’s bullish momentum persisted. Meanwhile, Indonesia’s foreign exchange reserves fell by USD $40 million in July.

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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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According to data released by the Indonesian Finance Ministry, Indonesia collected 1.25 billion euro (approx. USD $1.4 billion) through the issuance of 10-year euro-denominated bonds, yielding at a discount of 3.555 percent, on Thursday (23/07). With incoming bids at 1.9 billion euros, it is clear that investor appetite for Indonesia’s euro-denominated bonds declined compared to the country’s first euro-denominated bond issuance in July 2014 (which was oversubscribed 6.7 times and could therefore carry a yield of 2.976 percent only).

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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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Indonesia's main stock index (IHSG) increased 3.98 points to close at 4,724.41 on the last trading day (19/07). During last week, the index rose a limited 1.97 percent amid the context of a weakening IDR rupiah (Indonesia's currency even fell below the psychological boundary of IDR 10,000 against the US dollar). The IHSG's performance last week was mainly supported by rising shares in the country's finance, property, construction and metal mining sectors, while the cement and plantation sectors were corrected.

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Indonesia's main stock index (IHSG) ended the last trading day of this week in the plus. The index rose 0.08 percent to 4,724.41. The growth was limited because most Asian stocks fell as investors are looking for profit after a positive trading week. Global stock indices had a relatively good week after Ben Bernanke stated that the quantitative easing program (the Federal Reserve's monthly USD $85 billion bond-buying package), will continue as long as the US economy needs it, which gives rise to a low interest rate environment.

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Indonesia's main stock index (IHSG) went up 0.89 percent to 4,720.44 on Thursday (18/07). The index was supported by developments in the United States. On Wednesday (17/07), Ben Bernanke spoke to the US Congress and said that the Federal Reserve is likely to continue its bond-buying program in 2013 and may gradually withdraw the quantitative easing program in 2014. But only if economic recovery of the US provides the good context. This message supported the IHSG although foreign investors continued to record a net sale.

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Retail sales in May 2013 rose 1.5 percent (month to month) or 8.6 percent (year on year) in Indonesia according to a publication of Indonesia's central bank (Bank Indonesia) released on Tuesday evening (16/07). The report made a positive impact on today's trading day as stocks in Indonesia's consumer goods sector rose 2.5 percent. Indonesia's main stock index (IHSG) gained 0.75 percent to end at the level of 4,679.00 points. Foreigner investors are still mostly avoiding the Indonesian stock market, but did record a net purchase today.

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After finishing last week with three consecutive days of gains, Indonesia's main stock index (IHSG) reached up to 4,633.11. However, its movement is still rather volatile. Property, finance and consumption stocks were sold by investors after seeing the benchmark interest rate raised by Bank Indonesia (by 50 bps to 6.50 percent) on Thursday (11/07), while metal stocks formed the main supporter of the index at the end of the week. Trading volume in the regular market hit 5.2 trillion and foreigners recorded net purchases of IDR 288 billion.

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Indonesia's main stock index (IHSG) was able to continue its rise on Thursday (11/07) despite mixed markets in the United States and Europe, that were waiting for the release of the Federal Reserve minutes, on the previous day. The minutes and Ben Bernanke's speech indicate that the bond-buying program will be continued for a while and this made investors decide to buy Indonesian assets, particularly large cap stocks such as Unilever Indonesia, Bank Mandiri and Indocement Tunggal Prakarsa.

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After most European and American stock indices had been positive for a couple of days in a row, Indonesia's main stock index (IHSG) finally found its way up again. On Wednesday (10/07), the index rose 1.70 percent to 4,478.64 points. Moreover, on the previous day, Asian stock indices had shown a good performance and this convinced investors to buy Indonesian assets (which have fallen considerably recently) the next day. Despite foreigners still being net sellers of Indonesian stocks, a number of big cap stocks rose sharply.

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Indonesia's main stock index (IHSG) fell 3.68 percent to 4,433.63 on Monday's trading day (08/07). This current level is the lowest level of the IHSG since 26 June 2013. Of the 473 listed companies, 263 were down, 21 were up and the remainder did not move. Most Asian indices fell due to concerns about China's credit crisis that may impact on the country's economic growth and that the positive US employment report will affect continuation of the Federal Reserve's quantitative easing program. The MSCI Asia Pacific Index fell 1.6 percent.

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Although the main stock index of Indonesia (IHSG) ended on a positive note last Friday (05/07) by rising 0.46 percent to 4,602.81, foreign investors still sold a net IDR 262 billion (USD $26.5 million) worth of shares, while the value of transactions in the regular market was only IDR 3.17 trillion (USD $320.2 million). The rise of the IHSG at the end of last week was more due to support from Asian indices that were up after the European Central Bank and Bank of England kept interest rates at 0.5 percent.

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Indonesia's main stock index (IHSG) went up 0.46 percent to 4,602.81 on Friday (05/07). The index followed the general trend in Asia, where most stock indices rose. Of all 473 listed companies on the Indonesia stock exchange (IDX), 102 rose, 140 weakened, and 113 did not move. Foreign investors are still withdrawing their money from the IHSG. Today, foreigners recorded a net sale of IDR 260.7 billion (USD $26 million). Basic industry and consumption were the sectors that provided most support for the IHSG.

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