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Investors look beyond protests, take comfort in RI fundamentals
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Demonstrators set objects on fire on Aug. 22, 2024, amid clashes outside the House of Representatives in Jakarta during a protest against a move to reverse the Constitutional Court's decision to alter eligibility rules for candidates for a key election later this year. (AFP/Bay Ismoyo)
I
ndonesia has been through some turbulent weeks that could have swung investor sentiment either way, but market actors appeared largely nonchalant in a reflection of their confidence in the country’s political stability and solid economic fundamentals.
The first big event that could have shaken the market was the presentation of the government’s fiscal blueprint for 2025 on Aug. 16, one day ahead of Independence Day.
The following Monday, President Joko “Jokowi” Widodo rearranged the cabinet, spurring speculation about his intentions just weeks before handing the baton to his successor, president-elect Prabowo Subianto.
Mere days later, protests erupted nationwide over a controversial regional election ruling, with some rallies turning into chaos and some groups pushing for a weeklong demonstration to ensure that their demands are met.
Irrespective of the political nuances in the cabinet reshuffle and the thousands of demonstrators chanting “Revolution!” in front of the Senayan legislative complex, the market seemed undeterred.
When all was said and done, the rupiah had strengthened by 1.27 percent from Rp 15,690 per United States dollar on Aug. 15 to Rp 15,490 on Tuesday, certainly helped by the greenback’s weakness as the dollar index — a matrix that measures the US currency against six foreign ones — went down by 2.2 percent over the same period.
Analysts and Bank Indonesia (BI) officials say the rupiah’s movement today is largely dictated by what the dollar does and by global circumstances in general, rather than by recent domestic events.
