TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Rupiah, stocks gain despite BI's decision to hold interest rate
Indonesiaâs currency and stock prices gained on Tuesday despite the central bankâs decision to keep its benchmark interest rate steady at 7
Change Size
I
ndonesia's currency and stock prices gained on Tuesday despite the central bank's decision to keep its benchmark interest rate steady at 7.5 percent.
The rupiah strengthened to 13,098 against the US dollar in evening trading from 13,184 late on Monday. The currency reversed its decline after the central bank kept the interest rate unchanged and promised to ease lending policy in order to spur economic growth.
The currency has fallen more than 5 percent against the dollar this year, the worst performer among major Asian currencies.
Bank Indonesia's (BI) deputy governor Halim Alamsyah said Tuesday that the bank would ease its lending policy and introduce a new policy in the first half of this year to boost the country's economic growth, which dropped to 4.7 percent year-on-year (yoy) in the first quarter of this year.
The first policy will include the expansion of the upper limit of the loan-to-deposit ratio (LDR) to 94 percent from the current 92 percent, giving lenders a bigger chance to boost their lending portfolio.
Indonesian stocks also gained following BI's growth measures, led by banks. The construction, property and real estate index also climbed. Indonesia's broader Jakarta Composite Index (JCI) gained 0.6 percent to close at 5,269 in active trading.
The surge in the index was supported by the increase in several blue chips, including Telkom Indonesia, Astra International, Bank Mandiri, Bank BNI and Krakatau Steel.
Meanwhile, most Asian stocks rose as Chinese equities jumped amid buying of underperforming shares while Japan's Topix index gained on a weaker yen, Bloomberg reported.
A gauge of China financial companies soared 4.5 percent from its lowest level in six weeks as Huatai Securities Co. and Changjiang Securities Co. climbed by the 10 percent daily limit. Sony Corp. added 1.5 percent in Tokyo as makers of electric appliances contributed the most to the Topix's advance. Hanwha Chemical Corp. soared 14 percent in South Korea, leading gains in the regional benchmark index over optimism about its earnings.
The MSCI Asia Pacific Index climbed 0.2 percent to 153.65 as of 5:34 p.m. in Tokyo. The Shanghai Composite Index surged 3.1 percent, capping its biggest gain since Jan. 21 after two days of losses. Twenty companies are scheduled to sell initial public offering (IPO) shares from Tuesday to Thursday, which may freeze 2.8 trillion yuan ($451.1 billion). Japan's Topix added 0.4 percent after the yen fell 0.6 percent against the dollar on Monday.
Chinese 'investors that got allocations for new IPOs will hold, but those who didn't get as much as they wanted will deploy excess funds to stocks that have underperformed,' said Gerry Alfonso, a trader at Shenwan Hongyuan Group Co. in Shanghai, the second-largest listed mainland brokerage. 'If an investor doesn't want to take too much risk, they will park their funds in large caps and try again when there are new IPOs.'
Australia's S&P/ASX 200 Index slid 0.8 percent and South Korea's Kospi index increased 0.3 percent. Hanwha Chemical jumped 14 percent to 18,950 won. Investors may be optimistic about its second-quarter earnings outlook, Kiwoom Securities analyst Kim Sang Ku said. New Zealand's NZX 50 Index slipped 0.3 percent.
Hong Kong's Hang Seng Index advanced 0.4 percent, while the Hang Seng China Enterprises Index gained 1.9 percent.
