Jakarta, CNBC Indonesia – Indonesia’s financial markets tend to be mixed this week, with the Jakarta Composite Index (JCI) looking bright, but the rupiah weakening.
In a week, the JCI rose 0.47% on a basis point-to-point. In trading last Friday (18/3/2022), the JCI weakened 0.14% or 9.42 points to 6,954,965.
The weekly rally continued the strengthening that was printed the previous week by 0.58% or 40.16 points. Unfortunately, this week’s gains were not strong enough to bring the JCI to a new psychological level that was eagerly awaited, namely 7,000.
Data from the Indonesia Stock Exchange (IDX) shows that the total weekly trading value reached Rp 82.7 trillion, which came from transactions of 117.6 billion shares totaling 6.8 million times. Foreign investors scored net purchases (net buy) worth IDR 6.66 trillion in the regular market.
However, this week the rupiah has weakened by 0.74% (105 points) or reversed from the previous week which was still strengthening 0.45%, to Rp. 14,235/US dollar.
The rupiah weakened in two of the 5 trading days this week, namely Monday (by 0.67%) and Friday (0.28%).
This week, the market is focusing its attention on the central bank of the United States (US), the Federal Reserve (The Fed), while at home, the market is also paying attention to Bank Indonesia (BI).
Both this week announced their latest benchmark interest rate policy. From the US, the Fed is official raised its interest rate by 25 basis points (bp) on Wednesday US time or early Thursday Indonesian time, in line with market expectations.
The Fed also forecast aggressive plans for further rate hikes while cutting its economic growth forecast for this year.
Meanwhile, from within the country, BI decided to maintain its benchmark interest rate at the level of 3.5%. BI Governor, Perry Warjiyo, once again emphasized that interest rates will be maintained until there are signs of a fundamental increase in inflation.
After this week investors monitored the interest rate policy of the Fed and BI, next week, investors will monitor the interest rate policy of the People’s Bank of China (PBoC) which will be announced on Monday.
The PBoC is expected to maintain its benchmark lending rate, in which the 1-year tenor is expected to remain at 3.7% and the 5-year tenor at 4.6%.
In addition, UK inflation data for the February period will also be released next week, to be precise on Wednesday at 14:00 WIB. The market estimates that UK inflation will rise again as the price of energy commodities surged at the end of last month.
In the next week, data flash reading Manufacturing activity reflected in the March Purchasing Manager’s Index (PMI) will also be released. As for the countries that will release the data flash reading Manufacturing PMIs are Australia, Japan, European Union, UK and US.
Investors will also continue to monitor the latest developments surrounding the conflict between Russia and Ukraine next week, where the conflict between the two is still heating up despite repeated peace talks.
In addition, investors will also monitor the price movements of several energy commodities, such as crude oil, natural gas, and coal as tensions between Russia and Ukraine have not subsided, despite falling commodity prices this week.
CNBC INDONESIA RESEARCH TEAM
(chd / chd)
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