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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It was decided at the Board of Governors’ meeting (RDG) of Bank Indonesia on 12 September 2013 to raise the BI Rate by 25 bps to 7.25%, the rate on the Lending Facility by 25 bps to 7.25% and the rate on the Deposit Facility by 25 bps to 5.50%. This action forms part of the follow-up measures taken to reinforce the policy mix instituted by Bank Indonesia, which focuses on controlling inflation, stabilizing the rupiah exchange rate and ensuring the current account deficit is managed to a sustainable level.

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According to data from the Indonesian Cement Association (ASI), domestic cement sales have fallen 5.8 percent to 3.3 million tons in August 2013 (from the same month last year). Being an important indicator of economic expansion (as cement sales inform about the development of property and infrastructure projects in the country), these lower cement sales confirm the slowing pace of economic growth in Indonesia. Compared to July 2013, cement sales in Indonesia fell by a massive 32 percent.

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Without any real negative global reasons, Indonesia's benchmark stock index (IHSG) was down 0.20 percent to 4,349.42 points. Apparently, market participants were looking for profit taking after the index rose sharply in the last couple of days. There may also have been the psychological influence of the gaps at 4,191-4,225 and 4,072-4,102 that still need to be closed. Will the IHSG close these? Compared to the general upward trend of Asian indices, it seems strange if the IHSG would deviate from this trend only to close the gaps.

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Good economic data from China and Japan made many Asian stock indices go into green territory, including Indonesia's benchmark stock index (IHSG) which gained 3.98 percent to close at 4,358.14 points on Tuesday (10/09) despite the lack of positive internal factors in Indonesia. Promising European openings also provided support for the index. Foreign investors, similarly to yesterday, were net purchasers of Indonesian assets, while domestic investors mostly sold their assets.

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The release of positive economic data in China at the end of last week were continued into this week and had a good impact on regional stock indices. Most Asian stock indices continued their upward movement. This time, Indonesia's benchmark stock index (IHSG) was able to join its regional peers. Although Indonesia's investment climate is still not conducive, foreign investors were back buying more Indonesian stocks than they sold. The index rose 2.92 percent to 4,191.26 points on Monday (09/09).

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In recent years, Indonesia's car sales have shown robust growth, culminating in a record high number of 1.12 million sold car units in 2012. This is an important statistic because car sales inform us about the state of the economy. Generally, rising car sales indicate an expanding economy while declining car sales indicate that the economy is slowing down. When we take a look at the table below, there is a link visible between Indonesia's GDP growth and rising car sales, except for 2011 to 2012 when GDP growth declined while car sales rose.

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Although many global indices were up, Indonesia's benchmark stock index (IHSG) fell a total of 2.93 percent during last week's trading. One important issue on global indices is the tapering off of the Federal Reserve's quantitative easing (QE3). On 17 and 18 September, the next meeting of the FOMC is scheduled, which is expected to discuss the future of QE3. Notably, as the meeting comes closer, most global indices in fact rise. Thus, market players seem to have become less concerned about an end to QE3.

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Contrary to Thursday's trading day (05/09) when the benchmark stock index of Indonesia (IHSG) opened strong but ended in the red, on Friday (06/09) it was the other way round. The IHSG started negative but ended the day 0.53 percent up to 4,072.35 points. Factors that made a negative impact on the IHSG were the continueing fall of the rupiah as well as speculation that Indonesia's foreign exchange reserves would decline again at end-August. However, a number of rising Asian indices influenced the IHSG in a positive way.

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Indonesia's main stock index (IHSG) started rather well on Thursday's trading day (05/09) despite the fact that most analysts expected a weakening index. Positive market sentiments were triggered by rising Asian stock indices (brought on by yesterday's rising indices on Wall Street). However, as the rupiah continued its downward spiral, market players began to exit the market, thus resulting in the 0.55 percent fall of the IHSG to 4,050.86. Foreign investors were net sellers of Indonesian assets, while domestic players recorded a net purchase.

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Indonesia's benchmark stock index (IHSG) could not continue its rebound on Wednesday (04/09). Amid mostly falling Asian markets, the IHSG fell 2.17 percent to 4,073.46 points. Asia was on a four-day winning streak but after president Obama received support from the Republican speaker of the House of Representatives, John Boehner, regarding military actions in Syria, global investors shied away from riskier assets. Indonesia and India are currently viewed as weak investment targets due to the countries' current account deficits.

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