Following the U.S. mid‑term elections won by the Democratic Party, the Indonesian rupiah strengthened to Rp18,070 per dollar, rising 98 points from the prior close of Rp18,168 on Thursday. The lift was triggered by expectations of tighter U.S. trade, fiscal, and tax policy, lower U.S. Treasury yields and a shift to risk‑on sentiment among global investors.
The Rp’s advance coincided with a 10.1‑basis‑point drop in the 10‑year U.S. Treasury yield to 4.86 percent, and a weakening of the dollar index to 101.3. A more than 8‑percent decline in Brent crude oil prices to near US$95 per barrel also supported the currency’s rally.
"The rupiah’s gain was influenced by the results of the U.S. mid‑term elections, which were won by the Democratic Party," said Woori Saudara Bank analyst Rully Nova in Jakarta on Thursday.
Indonesia’s Composite Stock Price Index (IHSG) also rose, opening 78.57 points, or 1.60 percent, at 4,998.34. The LQ45 index of leading stocks increased 9.16 points, or 1.83 percent, to 510.40.
"The significant gains on Wall Street, the correction in crude oil prices and the U.S. dollar, and the rebound in gold prices could serve as positive sentiment," noted Ratna Lim, Head of Research at Phintraco Sekuritas. "The Democratic Party’s landslide victory could change the policy dynamics of the Trump administration, particularly on fiscal policy and international trade."
Investors remain alert to the upcoming Indonesian GDP data, expected to be released later that week, which could further influence market confidence.
