A coordinated response from the authorities is necessary to restore\ninvestor confidence and maintain financial market stability amid ongoing\npressure on the rupiah and the Indonesia Stock Exchange (IDX) Composite\n(IHSG), according to a senior analyst. The rupiah continued to weaken,\nbreaching a new psychological mark at around Rp18,000 per US dollar on\nThursday, whilst the IHSG extended a sharp correction with a 3.48 per\ncent drop at the close of the first trading session.<\/p>\n
M Nafan Aji Gusta, Senior Technical Analyst at Mirae Asset Sekuritas\nIndonesia, stated that Bank Indonesia (BI) needs to conduct more\naggressive intervention in the foreign exchange market and government\nbonds (SBN) to maintain rupiah stability. Concurrently, he believes the\ngovernment must strengthen incentive policies for export proceeds (DHE)\nto increase the domestic supply of foreign exchange.<\/p>\n
Furthermore, Danantara needs to provide clarification regarding its\noperational policies and developing sectoral issues to quell market\nuncertainty. The Ministry of State-Owned Enterprises and the Financial\nServices Authority (OJK) are also considered to need optimising the role\nof standby buyers and state-owned enterprise share buyback programmes to\nmaintain liquidity and investor confidence.<\/p>\n
On the other hand, the Indonesia Stock Exchange (BEI) needs to\nimplement symmetric and asymmetric auto rejection mechanisms in a\nmeasured way to maintain orderly trading and curb excessive market\nvolatility. In his research, Nafan noted that technically, the IHSG is\nactually in an extremely oversold condition based on the Relative\nStrength Index (RSI) indicator, although the downtrend is still ongoing.\nMeanwhile, the Stochastics K-D still shows a negative signal, but\ntransaction volume is beginning to strengthen.<\/p>\n
According to him, market pressure is still influenced by continued\nselling action by foreign investors. On Wednesday\u2019s trading, foreign\ninvestors recorded a net sell of approximately Rp864 billion, adding\npressure to a number of large-capitalisation stocks. In addition,\nnegative sentiment was also triggered by Moody\u2019s decision to assign a\nBaa2 (investment grade) rating to Danantara Investment Management (DIM)\nwith a negative outlook.<\/p>\n
This outlook indicates a potential for a future rating downgrade if\nvarious risk factors do not show improvement. He assessed that the\nmarket responded negatively to this sentiment, triggering a sell-off\nthat pressured the IHSG\u2019s movement. This condition also weighed on the\nrupiah exchange rate, which weakened to near the Rp18,000 per US dollar\nlevel, thereby increasing concerns about domestic financial market\nstability.<\/p>\n
Market participants are also anticipating short-term sentiment from\nthe FTSE Russell global index rebalancing which will become effective on\n22 June 2026. This index adjustment has the potential to affect the\nmovement of passive foreign funds making portfolio adjustments.\nExternally, rising tensions between Washington and Tehran amidst\nnegotiation uncertainty are also pushing up investor risk perception.\nAdditionally, the market is awaiting the release of US Nonfarm Payrolls\ndata for May at the end of this week, which is considered capable of\ninfluencing expectations for the direction of the Fed\u2019s interest rate\ngoing forward.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/coordinated-response-needed-to-restore-pressured-rupiah-and-jci-analyst-1780558158", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }