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Rupiah jumps 2.95 % at close, JCI follows
(JP)The rupiah jumped 420 points to Rp 13,821 per US dollar at Wednesdayâs close, an appreciation of 2
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(JP)
The rupiah jumped 420 points to Rp 13,821 per US dollar at Wednesday's close, an appreciation of 2.95 percent from Tuesday's closing session at Rp 14,241. The Jakarta Composite Index (JCI) followed the positive movement and managed to rebound.
An economist at Samuel Sekuritas, Lana Soelistianingsih, said that external factors were affecting the rupiah's appreciation more than internal factors such as the upcoming release of the government's third economic package.
"The rupiah's appreciation is totally factored by external, and not internal, factors. The third economic package is not clear yet, and investors don't want to buy pig in a poke although there are indications that the package will help purchasing power,"' Lana said as quoted by kompas.com.
The rupiah's positive movement was followed by the JCI. After a 0.39 percent decline in the first session, the JCI rebounded by 0.93 percent to 4,487.13 with a transaction value of Rp 6.18 trillion (US$449.3 million).
According to Lana, a decrease in the US' September factory employment sparked new speculation in the global market that the US Federal Reserve would not aggressively raise its benchmark interest rate this year.
If it had to, the Fed rate was predicted to rise in December 2015 at the earliest by 10 or 15 basis points, in order to preserve the US central bank's credibility as it had previously promised to raise rates this year, said Lana.
She suggested the Indonesia's central bank should ride out the situation by intervening in the market in a bid to help the rupiah appreciate further. "'And as the sentiment is now good enough, the government should release the next economic package. If it's effectual, the investors will respond positively."
On the Indonesia Stock Exchange (IDX), 188 stocks rose and 108 decreased, while another 84 were unchanged. Eight of 10 sectoral indices contributed to the gain, led by the basic industrial sector that rose 2.95 percent.
In Asia Pacific, the MSCI Asia Pacific Index rose 2.1 percent to 131.73. Hong Kong's Hang Seng Index shot up by 3.1 percent, South Korea's Kospi added 0.8 percent and Singapore's Straits Times Index rose 2.1 percent. (ags)
