The fate of the rupiah and the Jakarta Composite Index (JCI) is inversely proportional this weekend.
The Garuda currency depreciated in line with the fluctuation of the Indonesian stock market on Friday (21.10.2022).
The rupee has deteriorated and now stands at Rs 15,626.95 per US dollar.
The rupee is down 0.30% from yesterday and 1.24% for the week.
The exchange rate of the rupee has reportedly fallen by 9.51% since the beginning of the year. The rupee is at its weakest point in the last 2.5 years or since April 2020.
Meanwhile, government bond yields ( SUN ) are expected to rise again with the rise in the base interest rate. This afternoon, the yield on the 10-year FR0091 SUN bond rose again to 7.59%.
SUN benchmark returns are up 21% year-to-date. Until the end of 2021, SUN’s benchmark yield is still 6.27%.
Meanwhile, the 10-year US Treasury yield is at 4.25% this afternoon. US Treasury yields hit their highest level since June 2006.
Morgan Stanley raised its interest rate outlook at the end of the BI rate hike to 5.5% by the end of the year.
This means Morgan Stanley expects the 7-day reverse repo rate to rise by a total of 75 basis points.
“Bank Indonesia wants inflation to reach its target faster than expected and limit the exchange rate’s weakening against the dollar,” Morgan Stanley analysts Derrick Kam and Jin Choi said in a statement cited by Bloomberg.
The weakening of the rupee exchange rate was in line with the movement of almost all Asian currencies. Only the Philippine peso rose this morning against the US dollar, according to Bloomberg data.
Meanwhile, the Chinese Yuan (CNY) weakened the most against the US dollar. The weakening of the yuan was followed by the baht, Taiwanese dollar, Korean won, Malaysian ringgit, rupiah, Singapore dollar, yen, Japanese and Hong Kong dollars.
While the dollar is showing strength again. This morning, the dollar index rose to 113.11 after a slight weakening the previous day.
The index, which reflects the exchange rate of the US dollar against major currencies, is likely to remain flat during the week.
“BI has been relatively strong in raising interest rates compared to other central banks, and we believe BI’s work is far from done,” Nicholas Mapa, senior economist at ING, said in a statement quoted by Bloomberg.
ING expects further exchange rate hikes to counter the weakening and stability of the rupee exchange rate due to market risk aversion and rising inflation.
JCI is getting stronger
Meanwhile, JCI ended higher in stock trading on the Indonesian Stock Exchange (IDX) this weekend.
Citing data from the Indonesian Stock Exchange (IDX) via RTI Business, the JCI rose 37.11 points, or 0.53%, to 7,017 on Friday (10/21).
Meanwhile, the JCI strengthened by 2.98% for the week of October 17-21, 2022.
JCI growth was supported by seven of the 11 IDX sectors. The sector that received the most was the financial sector, increasing by 1.53%. The infrastructure sector grew by 1.32%. The non-primary consumption sector grew by 0.85%.
Then the transport sector increased by 0.69%. The health sector grew by 0.49%. The industrial sector increased by 0.47% and the energy sector increased by 0.16%.
Meanwhile, the technology sector corrected, down 0.99%. The goods sector fell by 0.89%. The FMCG sector fell 0.57%, while the real estate and real estate sector fell 0.51%.
Total stock trading volume on IDX reached Rp 20.96 billion on Friday, with a total transaction value of Rp 13.37 trillion.
298 stocks advanced, 237 stocks declined and 168 stocks remained flat.
LQ45 winners are:
1. PT BFI Finance Indonesia Tbk (BFIN) 6.47% to Rs 1,070 per share 2. PT Bank Mandiri Tbk (BMRI) 4.55% to Rs 10,350 per share 3. PT Bank Syariah Indonesia Tbk (BRIS) 3.46% to at 1 IDR 344. Action
Losers in LQ45 were:
1. PT Vale Indonesia Tbk (INCO) 4.36% at Rs 6,575 per share 2. PT XL Axiata Tbk (EXCL) 3.52% at Rs 2,470 per share 3. PT Japfa Comfeed Indonesia Tbk (JPFA) 3.04% at Rs 1,435 per share