JAKARTA — A steep selloff in Indonesia’s stocks and currency on Friday prompted regulators to step in to calm the markets following several days of student protests that have stung investor sentiment.
Indonesia’s central bank said on Friday it would remain active in the foreign exchange market to stabilise the rupiah, while the stock exchange regulator said market fundamentals remained strong despite a sudden fall in prices.
The rupiah dropped nearly 1 percent to its weakest level since August 1, before regaining some of the losses, and was last at 16,475 per dollar. The stock index (.JKSE), opens new tab fell more than 2 percent to its lowest in over two weeks.
Indonesian students said they would protest at Jakarta’s police headquarters on Friday after a motorcycle rider died when he was hit by a police vehicle during violent clashes following a demonstration outside the parliament the day before.
Students and workers have been protesting this week on a number of issues including lawmakers’ pay, education funding and the government’s school meals programme.
DBS senior economist Radhika Rao said the escalating street protests in the capital have hurt rupiah assets as investors weigh the risk of broader unrest and policy uncertainty.
“The central bank showed their hand to arrest volatility in the domestic markets, especially the currency, which weakened sharply, bucking the regional trend,” Rao said.
