Indonesia’s stock market experienced a notable downturn on Thursday, with the Jakarta Composite Index (JCI) decreasing by 1.51%, or 80 points, to settle at 5,247. This decline comes as investors weighed the impact of domestic monetary adjustments by Bank Indonesia alongside persistent global economic uncertainties.
Throughout the early trading session, the index oscillated between 5,185 and 5,350, underscoring the volatile sentiment among investors. A total of approximately 1.22 billion shares changed hands in 76,140 transactions, amassing a combined value of Rp 582.44 billion. The market witnessed extensive losses, with 519 stocks declining, only 54 advancing, and 106 remaining unchanged.
In an effort to bolster economic stability, Bank Indonesia decided to maintain its benchmark interest rate at 5.75% and its lending facility rate at 6.5%, while slightly increasing the deposit facility rate by 25 basis points to 5%. The central bank also introduced measures aimed at attracting foreign investment and supporting the national currency, the rupiah.
Bank Indonesia announced a plan to enhance banking system liquidity by reducing the average reserve requirement for conventional commercial banks. This reduction will occur in two stages, lowering from 9% to 8% on November 1, 2026, and further decreasing to 7% by December 1.
Despite the domestic market’s struggles, Indonesian stocks garnered attention from international investors following remarks by President Prabowo Subianto. This interest led to a 2% gain in the US-listed iShares MSCI Indonesia ETF. However, analysts cautioned that this uptick might not indicate a sustained recovery.
Contributing to the cautious market sentiment are ongoing global economic challenges, including persistent inflationary pressures and uncertainty about future market conditions. The broader Asian markets mirrored this apprehension, with indices such as Japan’s Nikkei 225, South Korea’s Kospi, Hong Kong’s Hang Seng, and Shanghai’s SSE Composite all opening lower.