MONEY MASTER

Indonesia’s central bank has stepped up monitoring of financial markets as geopolitical escalation in the Middle East triggers renewed risk-off flows across emerging markets. The rupiah weakened as much as 0.45% to 16,835 per US dollar during Monday trading. What Bank Indonesia Said Bank Indonesia  said it will: Closely monitor market movements Ensure the rupiah moves in line with fundamentals Remain active in the foreign exchange market Improve effectiveness of interest-rate policy transmission Interventions will include: Spot market operations Onshore non-deliverable forwards (NDF) Offshore NDF transactions The move comes after escalation following the US attack on Iran triggered global risk aversion. Money Master Take This is a pre-emptive credibility defence, not a panic response. 1. Central Bank Is Signalling Presence Early By announcing readiness to intervene: Bank Indonesia is anchoring expectations It is discouraging speculative attacks It is limiting disorderly currency mo...

Summary Indonesian markets came under renewed pressure after  Moody's  downgraded the country’s  credit rating outlook to negative , amplifying concerns over  policy uncertainty, governance, and capital outflows  following recent market turmoil. What Happened Moody’s cut Indonesia’s outlook to negative from stable , while keeping the  Baa2 rating unchanged The move followed  MSCI ’s warning over transparency issues that had already triggered a  US$80 billion market rout Stocks and currency weakened immediately  in early trade Market Reaction Jakarta Composite Index:   -2%  intraday, extending weekly losses Rupiah:  Fell to  16,880 per US dollar , near recent record lows International bonds:  Longer-dated dollar bonds slipped  0.3–0.5 cents , trading at  five-month lows Key point:  Investors are demanding a  higher risk premium  across Indonesian assets. Why Moody’s Is Concerned Moody’s cited: ...

Simple Summary Rupee posts its biggest gain in over three years Indian stocks jump the most since 2021 US slashes tariffs on Indian goods to 18% Deal removes a major overhang on Indian markets What Happened Indian markets roared higher after US President  Donald Trump  announced a sharp  tariff cut on Indian goods to 18% , down from 25%, while also  scrapping an additional 25% levy  tied to India’s purchases of Russian crude. Market Reaction Nifty 50 Index:   +5% intraday  (biggest jump since 2021) Indian rupee:   +1.2% to 90.46/USD , its strongest move in more than three years The deal delivered  much-needed relief  to the rupee, which had been  Asia’s worst-performing currency in January . Why It Matters India sends a  large share of exports to the US Tariffs had weighed on  equities, currency and foreign inflows The agreement  lifts a key source of uncertainty  for investors “The deal finally provides some rel...

  Key Takeaways: Market Selloff:  Jakarta Composite Index fell  2.3% intraday , closing down  1.3% , marking its sharpest fall since June 23. Currency Weakness:  Rupiah dropped  0.95% to 16,495/USD , before paring losses to  -0.8%  on suspected Bank Indonesia intervention. Trigger:  Violent protests in Jakarta, including a fatal incident, have raised political risk concerns and shaken investor sentiment. Regional Context:  Asian markets broadly cautious ahead of  US inflation data , with most currencies weaker; the  Philippines peso  and  South Korean won  down 0.4%. Broader Trend:  Despite today’s fall, Jakarta benchmark remains  +3.8% in August , following a strong rally since April. Market Reaction Equities:  The Jakarta Composite Index (JCI) staged its steepest intraday drop in two months, as investors reacted to violent protests over lawmakers’ pay and education funding. Profit-taking was a cl...

Foreign investors are exiting   Indonesian stocks   for the   15th straight session , marking an   equity outflow   of   US$891 million (RM3.96 billion)   so far in November, according to   Bloomberg   data. This has pushed the nation’s   benchmark equity index   to the brink of a correction, dropping   9%   from its record high on   Sept 19 . The retreat is fueled by a  stronger US dollar  and  higher treasury yields , triggered by expectations that  President-elect Donald Trump’s policies  will heighten US inflation and limit Federal Reserve  rate cuts . The  rupiah  has weakened  1%  this month, while foreign investors have also sold  US$810 million  worth of Indonesian  government bonds , poised for their first monthly outflow since  April . “What was initially a major  tailwind for ASEAN , such as a  weaker dollar  and lower rate...

  Asian stock markets saw gains on Monday, while regional currencies dipped as investors weighed China's stimulus measures and turned their attention to upcoming monetary policy decisions in Indonesia , Thailand , and the Philippines . China's announcement to "significantly increase" debt to support its economy lacked clarity on the overall stimulus size, leading to cautious optimism. Shanghai stocks rallied by 1.7% , while the yuan weakened by 0.2% . In South Korea , the won fell by 0.4% , and the Malaysian ringgit dipped 0.2% as the US dollar extended its gains. Singapore stocks added 0.5% , although the Singapore dollar edged lower after the Monetary Authority of Singapore kept its monetary policy unchanged, citing economic growth in the third quarter. This week’s focus shifts to rate decisions in Indonesia , Thailand , and the Philippines , with the Bangko Sentral ng Pilipinas expected to cut rates by 25 basis points to support growth. Bank Indonesia...

Indonesia's central bank unexpectedly reduced its key interest rate for the first time in over three years, lowering the BI-Rate by a quarter-point to 6% . This surprise move, which was anticipated by only 10 of 36 economists in a Bloomberg News survey, marks a pivot toward supporting the country’s economic growth as the Federal Reserve gears up for its own policy changes. Governor Perry Warjiyo emphasized the need to act now, stating, "The time is right" for Bank Indonesia (BI) to step in and boost growth. Warjiyo added that this decision will help Southeast Asia's largest economy achieve higher growth , especially as the central bank anticipates further rate cuts by the Federal Reserve . The rupiah , which rallied nearly 7% this quarter, is trading close to its strongest level against the US dollar in a year, giving BI more flexibility to act sooner. The bank expects the Fed to cut rates by 25 basis points three times this year and another four times in 2025, con...

The Indian rupee, which began the year as one of emerging Asia's best-performing currencies, has become one of the region's worst performers this quarter. A combination of factors, including equity outflows, increased dollar demand from importers, and potential shifts in central bank policy, are contributing to the currency's decline, with expectations of further weakening. Current Market Dynamics Rupee's Recent Performance: The rupee ended at 83.75 on Friday, down 1.3% from its 2024 peak in March. It has recently tested successive lows due to outflows from local stocks, driven in part by a hike in equity taxes and heightened dollar demand from importers. Currency Outlook: Barclays Plc predicts the rupee will weaken to 83.85 against the US dollar in the near term. Morgan Stanley targets a rate of 85.2 within a year for the dollar-rupee pair. Factors Influencing the Rupee Foreign Outflows and Risk Sentiment: The rupee's underperformance is linked to foreign inv...

Indonesia’s central bank maintained its policy rate at 6.25% on Wednesday, marking its third consecutive meeting of cautious pause aimed at supporting the rupiah. Key Highlights: Policy Rate Unchanged: Bank Indonesia (BI) kept the BI-rate steady at 6.25%, a decision anticipated by all 35 economists surveyed by Bloomberg News. This rate is the highest since the benchmark was introduced in 2016. Governor's Stance: Governor Perry Warjiyo reaffirmed that the central bank would maintain the policy rate until the currency stabilizes. He mentioned that a rate cut might be considered in the fourth quarter. Economic Outlook: Global Growth and Domestic Performance: BI maintained its global growth outlook at 3.2% for the year and expects Indonesia’s economic performance to stay strong in the second half. The GDP forecast for 2024 remains at 4.7-5.5% growth. Rupiah Strength: The rupiah has appreciated by about 1.5% against the US dollar this month, supported by returning foreign investment...