Indonesia's Jakarta Composite Index is down and the rupiah is continuing its upward trend.
Indonesia’s Jakarta Composite Index slid 13.63 points, or 0.5 percent, to 3,045.35 as of 10:12 a.m. local time, set to fall for a third day.
Apac Citra Centertex, a manufacturer of textile and garment products, declined 1.2 percent to Rp 80, dropping for the first time in eight days. The company said first-half net loss widened to Rp 26.4 billion from Rp 7.8 billion a year earlier.
Perusahaan Perkebunan London Sumatra Indonesia, a palm oil and rubber producer, rose 1.1 percent to Rp 9,000. Rubber climbed to a five-week high as declining inventories in Japan and rising crude oil prices enhanced the appeal of the commodity used to make tires. January-delivery rubber rose as much as 6.4 yen to 285.9 yen per kilogram ($3,305 a ton) before trading at 281.2 yen at 10:41 a.m. local time.
The rupiah, meanwhile, advanced for a ninth day, its longest winning streak since December 2005, before a report this week that is forecast to show the fastest quarterly economic growth since 2008.
Bank Indonesia will tomorrow keep its benchmark interest rate at a record-low 6.5 percent for a 12th straight month to support expansion, according to all 22 economists in a Bloomberg survey of economists.
Gross domestic product increased 6 percent from a year earlier in the last quarter following a 5.7 percent advance in the previous three months, based on the median estimate in a separate poll. The data is due Aug. 5.
“Sentiment is buoyant on economic growth, which is supporting the rupiah,” said Joanna Tan, a regional economist at Forecast Singapore Pte. “Definitely, we will see good growth numbers for the second quarter.”
The rupiah rose 0.1 percent to 8,943 per dollar as of 10:25 a.m. in Jakarta, according to data compiled by Bloomberg. It has appreciated 11 percent in the past 12 months and earlier today reached 8,905, the strongest level since June 2007. The central bank may intervene at 8,900 to limit gains, Tan said.
Overseas investors yesterday bought $11.4 million more Indonesian stocks than they sold, boosting net purchases for the year to $1.4 billion. They pumped $541 million into the securities last month, the most since April 2007.
The Indonesian rupiah may strengthen further and the central bank will continue to guard the currency against excessive gains, Bank Indonesia Deputy Governor Hartadi Sarwono said on July 30. President Susilo Bambang Yudhoyono is targeting average annual economic growth of 6.6 percent.
