Indonesian rupiah corrects
The Indonesian rupiah fell against the US dollar on October 15, 2015, after rising in the previous session. Bank Indonesia governor Agus Martowardojo kept the reference rate at 7.5%—in line with expectations. The recent rebound in the Indonesian rupiah reduced the worries about pressure on Indonesia’s domestic currency through outflows by foreign portfolio investors when the US begins hiking interest rates in the future. Indonesia’s economic growth has been the slowest since 2009. However, Bank Indonesia decided to take a “wait and see” approach, even as its peers like India and Singapore have been easing their monetary policies.
Trade balance rises as imports fall more than exports
The Indonesian trade balance rose to $1.02 billion in September—up from $0.33 billion in August. Imports fell faster than exports. On an annual basis, even as exports fell by 18%, imports fell by 26% compared to the level last year. The fall in imports was primarily driven by a fall in oil and gas prices globally. Even though the Indonesian rupiah has risen remarkably in the previous few sessions, the overall effect of depreciation this year has been larger against the US dollar.
Impact on the market
Looking at the ETFs, the iShares MSCI Indonesia ETF (EIDO) was trading on a positive note on October 15, 2015, by 2.0%. On a similar trajectory, the Market Vectors Indonesia ETF (IDX) rose by 2.2%.
Looking at the South Asian ADRs (American depositary receipts), PT Telekomunikasi Indonesia Tbk (TLK) rose by 4%. Philippine Long Distance Telephone (PHI) rose by 1.2% during the day. On the other hand, Taiwan Semiconductor Manufacturing (TSM) traded negatively by 1.8%.
original source: http://marketrealist.com/2015/10/rupiah-corrects-bank-indonesia-didnt-change-rates/