IHSG Strengthens Amid "Wait and See" Stance on Central Bank Interest Rate Direction
Jakarta – Indonesia’s Composite Stock Index (IHSG) on the Indonesia Stock Exchange (BEI) strengthened on Tuesday morning as market participants adopted a “wait and see” approach towards the direction of interest rate policy from central banks, both domestically and internationally.
The IHSG opened strongly, gaining 52.32 points or 0.75 per cent to reach 7,074.61. Meanwhile, the leading index of 45 stocks, the LQ45 Index, rose 6.99 points or 0.98 per cent to 720.72.
“Ahead of the long holiday break, investors are expected to exercise caution amid lingering uncertainty. The IHSG is estimated to move within a range of 6,900-7,150,” said Phintraco Securities Head of Research Ratna Lim in her analysis in Jakarta on Tuesday.
From abroad, market participants are awaiting central bank decisions from various countries this week, including the United States Federal Reserve, scheduled to announce decisions on Wednesday (18 March).
This decision will be the first opportunity for central banks to react to the escalating conflict between the US and Israel with Iran, which has now entered its third week.
On the other hand, global crude oil price movements remain the focus of market participants, as the Strait of Hormuz closure continues to obstruct energy flows and threaten the global economy.
Although the US has attempted to allay supply concerns, including through the relaxation of some sanctions against Russian oil, crude oil prices continue to rise.
Meanwhile, US President Donald Trump has called on several countries to help the US reopen the Strait of Hormuz, but some nations have shown reluctance to provide assistance.
On another note, Trump stated that his planned trip to China at the end of March 2026 could be postponed, as the US seeks to press China to help reopen the Strait of Hormuz.
Domestically, concerns about the impact of rising oil prices on inflation, the potential widening of the budget deficit, rupiah depreciation, and potential economic slowdown have become negative factors affecting IHSG movements.
President Prabowo reaffirmed his commitment to fiscal discipline, stating that a core principle of his administration is to ensure that Indonesia lives within its means.
The President emphasised that loosening the budget deficit is a last resort option. He stated he would only consider widening the budget deficit ceiling to a maximum of 3 per cent of GDP if Indonesia faces an extraordinary emergency situation.
On the other hand, market participants are awaiting the results of Bank Indonesia’s Board of Governors meeting today, which is expected to maintain the BI Rate at 4.75 per cent.
Meanwhile, banking sector credit growth is estimated to increase 10.1 per cent year-on-year in February 2026, up from 9.96 per cent in January 2026.
During trading on Monday (16 March), European stock markets were uniformly strong, including the Euro Stoxx 50 gaining 0.44 per cent, the UK FTSE 100 index rising 0.55 per cent, the German DAX index gaining 0.50 per cent, and the CAC index advancing 0.31 per cent.
US stock markets on Wall Street were also uniformly strong on Monday (16 March), with the Nasdaq Composite index gaining 1.13 per cent to 24,655.34, the S&P 500 rising 1.01 per cent to 6,699.38, and the Dow Jones index gaining 0.83 per cent to 46,946.41.
Asian regional stock markets this morning included the Nikkei index gaining 285.50 points or 0.53 per cent to 54,036.60, the Hang Seng index gaining 336.26 points or 1.30 per cent to 26,170.29, the Shanghai index gaining 11.93 points or 0.29 per cent to 4,096.72, and the Straits Times index gaining 56.37 points or 1.16 per cent to 4,925.06.