- Indonesia’s Rupiah has dropped to 16-month lows.
- Indonesia’s finance minister announced fiscal stimulus with tax breaks.
Indonesian Rupiah (IDR) is losing ground on Friday despite the Finance minister announcing a fiscal stimulus to counter the coronavirus-led slowdown.
The USD/IDR pair is currently trading at 14,980, the highest level since September 2018.
Indonesia’s Finance Minister was out on the wires a few minutes before press time, stating that a fiscal stimulus of IDR 120 trillion or 0.8% of the gross domestic product will be provided to support the economy.
He added further that the government will exempt income tax for workers in the manufacturing sector earning a below-200 million IDR annual salary. The tax relief will begin in April and last for six months.
So far, the stimulus news has failed to put a bid under IDR and Indonesia’s stocks. The benchmark index IDX Composite is currently reporting a 5% drop on the day.
Markets across the globe are struggling to cheer stimulus talk. In fact, the S&P 500, Wall Street’s benchmark index, fell by over 9% on Thursday even though the Federal Reserve unveiled stimulus worth $1.5 trillion in an effort to combat “temporary disruptions” in funding markets.
Technical levels
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