Indonesia shares decrease, and the currency is weakening with Dent’s morale

Indonesia faces a difficult political climate, as protests are wrestling over the high costs of living, wages for legislators and police violence, which will harm the feelings of investors in the largest economy in Southeast Asia.

The Jakarta Composite index fell up to 3.6 % on Monday, while the Indonesian Rubia fell to 16,500 against the US dollar-the weakest level of the day since August 1-according to LSEG data.

Many market monitors said that while violence and protests rocked the confidence of investors, it is unlikely to challenge the main growth story of Indonesia.

The last sales operations were “paid feelings” in the first place, as investors’ reaction to developments during the weekend was.

Hao said that Indonesia is still ranked among the most stable emerging markets, and it ignores the impact of demonstrations as a setback in the short term. “I don’t think it is completely changing the story at this stage.”

The potential smoothness of the near -term of rupees is expected to be temporary and is likely to be reflected when local uncertainty fades, according to Kristover Wong, FX analyst at OCBC. Refrain from giving more accurate predictions, indicating increased uncertainty.

It was not clear whether the demonstrations in Jakarta or other cities would continue on Monday, as some Indonesian students and civil society groups canceled protests to avoid any violent escalation by the authorities.

Investors will see the next steps for the government to address the public demands and improve market confidence. “On a slight positive side, Indonesia can appear stronger if structural repairs are carried out.”

Rathika Rao, DBS economist, agreed that long -term growth drivers are still healthy for Indonesia. She said investors will monitor any signs of government’s priority to enhance growth and jobs, expecting that part of Jakarta spending discounts to reduce unemployment will be directed.

She said that the Bank of Indonesia still has a wide space to maintain the air -conditioning policy, expecting the central bank to act quickly to calm the markets and intervene to support the rupee when it deserves.

The return on government bonds in Indonesia increased for 10 years to 6.335 on Monday, while debt revenues have not changed for a little bit at 6,850, according to LSEG data.

Housing allowances for legislators who are said 10 times the minimum monthly in the country The wage at a time when tax increases, the demobilization of workers and the low -income Indonesian inflation, for the key to displacement of public anger.

This resentment from economic hardship turned to wider anger after a motorcycle taxi driver It is said He was killed while the police were held in a The protest site last Thursday. This incident sparked a wave of violent protests in many Indonesian cities, and called for police reform.

The protests intensified during the weekend, as rioters target the homes of the legislators, loot them, looting real estate, and burning government buildings, according to what they mentioned. Media reports. Hundreds of people It is said Finance Minister Sri Moliani stormed South Tangrang, forcing their way to precious things.

In an attempt to put out public anger, Indonesian President Prabu Sobanto said on Sunday that Parliament in the country would listen and act on people’s concerns, pledging to reduce the huge allowances of the legislators.

Indonesia, the fourth largest economy in the world and has a population of 284 million, was one of the most stable economies of Southeast Asia. The latest protests, which killed at least five hundred and injury, created the worst crisis of the country since Subanto took office about a year ago.

“This moment is a major test of the Brabu’s approach to the opposition,” said Bob Herrera Lim, TENEO, Management Director of Political Consulting. “The president may worry that continuing to return in the streets for more than a few days may generate the impression that it encourages popular opposition to appearing to challenge his government.”

The president has warned against taking fixed measures against violent demonstrators. He said: “We cannot deny that signs of external actions, and even illegal, have begun to appear, and even lead to treason and terrorism.”