Jakarta, CNBC Indonesia – The Composite Stock Price Index (JCI) finally managed to strengthen after falling for six consecutive days with a total of almost 7%. Unfortunately, the rise of the JCI has not been able to be followed by the rupiah and the bond market, where the majority of the tenors of Government Securities (SBN) have weakened.
However, the JCI is still in the range of falling again, as well as the rupiah, which was able to penetrate above Rp. 14,500/US$ on Wednesday (6/7/2022), because of this, the world recession continues to haunt. Not even just a recession, some predict it will happen long recessionwhich will be discussed on pages 3 and 4.
Last Tuesday, the JCI managed to record a 0.97% gain to 6,703,266. Unfortunately, foreign investors are still doing net selling (net sell) worth IDR 575.51 billion in the regular market, cash and negotiable.
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Meanwhile, the rupiah weakened 0.13% against the US dollar to Rp. 14,985/US$, which is the weakest level since May 2020. The rupiah is now only 0.1% away from the psychological level of Rp. 15,000/US$.
Bank Indonesia continues to monitor the weakening of the rupiah. The Governor of BI, Perry Warjiyo, gave a new policy signal in responding to global economic developments that are full of uncertainty and affect domestic conditions.
This was conveyed by Perry in a press release published Monday (4/7/2022). A series of global uncertainties is marked by the risk of stagflation in line with the increase in global policy interest rates in the midst of a recovering economy, as well as the increasing extent of protectionist policies by various countries.
“Going forward, Bank Indonesia will continue to monitor global and domestic economic and financial developments, formulate and implement the necessary measures to ensure macroeconomic and financial stability, including further adjustments. stance policies if needed, and continue to strengthen synergies with the Government to accelerate the recovery of the national economy,” he explained.
The sentence “adjustment stance Further information” could be an indication that BI is starting to consider raising interest rates to maintain rupiah stability, as well as rising inflation.
From the bond market, only 25 and 30 year government bonds experienced slight gains.
Movement yield inversely proportional to the bond price, when yield price goes up, and vice versa. When the price goes up, it means there is a buying action. Although lately the bond market has moved more stable than the stock market, but capital outflow what happened was huge.
Total foreign funds out of the Indonesian bond market exceeded US$ 3.1 billion last quarter. Foreign investors left Indonesia not because of domestic fundamentals but more because of recession fears.
Bank Indonesia data shows that until the first semester of this year, outflow in the SBN market of Rp 111.12 trillion
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