Rupiah Rebounds After Historic Low, Indonesian Stocks Rally
نظرة سريعة
- The Indonesian rupiah recovered from a historic low, trading at 17,762 to the US dollar.
- The Indonesia Composite Index also rallied 5% after significant market turbulence.
- Analysts attribute the recovery to Bank Indonesia's aggressive monetary policy, including rate hikes.
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لماذا يهم
The Indonesian rupiah had fallen to a historic low, and the stock market experienced significant turbulence over the preceding six months.
The rupiah was trading at 17,762 to the US dollar as of Wednesday, a rebound from its historic low of 18,000 the previous week. The Indonesia Composite Index also rallied by as much as 5 per cent on Monday after market turbulence had wiped more than 32 per cent off the stock market’s value over the previous six months.
Analysts attributed the rupiah’s recovery to Bank Indonesia’s decisive monetary response. The central bank has enacted back-to-back rate increases totalling 75 basis points in recent weeks, pushing its benchmark lending rate to 5.5 per cent – marginally above the US Federal Reserve’s current 3.5–3.75 per cent range.
“This was a fairly swift and highly unusual move compared to previous BI policies,” said Mohammad Faisal, executive director of the Centre of Reform on Economics Indonesia think tank.
أسئلة مفتوحة
- Will the rate hikes be sustained?
- How will global economic factors impact the rupiah?
