Rupiah closed down 0.46 percent to 14,175 against US dollar while Jakarta Composite Index slipped 0.65 percent to 6,340.18 - Photo: Special

JAKARTA (TheInsiderStories) – Indonesian Rupiah and the Jakarta Composite Index (JCI) plummeted today after United State (US) President Donald Trump announced would impose a new import duty for Chinese goods. At the end of trading on Friday (08/02), Rupiah closed down 0.46 percent to 14,175 against US dollar from prior day while JCI slipped 0.65 percent to 6,340.18.

Commenting on the Rupiah performance, Executive Director at the Bank Indonesia (BI) Nanang Hendarsah, said because of profit-taking action in the bond market and Trump’ statement. He viewed this weakening was only temporary and could not be protracted after the two countries could reach an agreement.

He rated, event dropped significantly today, the current Indonesian bond yields are still attractive compared to other developing country bonds. Hendarsah announced that the central bank is intervening the bond market to avoid the panic situation.

Furthermore, he added, BI will take various steps to prevent Rupiah weakened sharply by making purchases in the State bond market and intervene the Domestic Non-Deliverable Forward market.

“BI will also continue to be in the market to maintain the stability of the Rupiah,” said Hendarsah.

On the stock market, analyst from PT Valbury Sekuritas Indonesia Alfiansyah assessed mixed sentiments could push the JCI to lower level. Beside Indonesia, he said, stock markets in Asian region also hit by corrections as investor disappointment on Federal Reserves’ chairman Jerome Powell comments that dismissed further hope the central bank will cut its interest rate again in second half of 2019.

Inline with JCAI, all major stock exchanges in Asian region also dropped. Nikkei index fell 2.1 percent, Shanghai collapsed 1.44 percent, Hang Seng slipped 2.02 percent, Straits Times Index down 0.43 percent, and Kospi corrected 0.93 percent.

As reported, President Trump again ignited the fire of trade war with China. The property tycoon threatened to impose a 10 percent import duty on imports of Chinese products worth $300 billion.

Even though the US delegation had just returned from trade negotiations in Shanghai, the negotiations were said to be quite constructive by both parties. Of course, the minds of investors from both countries will still be intimate even though there is no trade agreement.

In fact, Trump suddenly raised import duties, investors two days in a row got a shock effect that triggered profit-taking. Earlier, he said that China did not committed to the agreement has been made with President Xi Jinping in the last meeting at Osaka, Japan to buy more US agricultural products. He said, it was the worst transaction in 27 years.

Written by Willy Matrona Email: theinsiderstories@gmail.com