Jakarta, CNBC Indonesia – The Composite Stock Price Index (JCI) scored an all-time high on trading Friday (11/19), while posting a 2-week gain in a row. Bond prices (State Securities/SBN), also recorded a strengthening, only the rupiah was stagnant this week.
In the next week, several factors will affect the movement of domestic financial markets, one of the most important is the possibility of replacing the chairman of the United States (US) central bank, currently held by Jerome Powell. The factors affecting the market next week will be discussed on pages 2 and 3.
JCI successfully posted a 1.04% gain to 6,720,263 this week. While the all-time high, just slightly above it at 6,720,988.
From the bond market, SBN all tenors experienced a price increase that was seen from the decline in yield (yield).
Bond price movements are inversely proportional to yields. When the price goes up then the yield will go down, and vice versa.
Here is the movement of SBN yields throughout the week.
Meanwhile, the rupiah was stagnant at Rp. 14,235/US$, previously fluctuated by strengthening to Rp. 14,180/US$, then weakening to Rp. 14,270/US$.
Good news coming from within the country this week. Bank Indonesia (BI) reported that Indonesia’s Balance of Payments (BOP) posted a surplus of US$ 10.7 billion in the third quarter of 2021. Much better than the previous quarter, which had a deficit of US$ 0.4 billion.
“The balance of payments performance was supported by the current account which recorded a surplus, reversing from the previous quarter which recorded a deficit, as well as an increasing surplus in the capital and financial account,” said BI in a written statement, Friday (11/19/2021).
The current account in the third quarter of 2021 recorded a surplus of US$ 4.5 billion or 1.5 percent of Gross Domestic Product (GDP). Also improved compared to the previous quarter which was minus US$ 2 billion (0.7% of GDP).
The surplus in the third quarter of 2021 is the highest since the fourth quarter of 2009.
The current account performance was mainly contributed by the increasing surplus in the goods balance, supported by higher non-oil and gas exports in line with strong demand from trading partner countries and continued increases in prices of key export commodities on the international market.
The current account is a crucial factor in dictating the rate of the rupiah because foreign exchange flows from this account tend to be more stable.
The stability of the rupiah is very important because it provides convenience for foreign investors to invest in the country. This is because the risk of loss due to the exchange rate is minimal.
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