** IHSG Drops to Lowest Level, Rupiah Becomes Worst Performer in Asia**
Reported by Bloomberg Market Data, Wednesday (12/01), the Rupiah became one of the currencies with the worst performance in Asia after falling 1.7% to Rp16,363 per US dollar. Not only that, the Composite Stock Price Index (IHSG) also fell more than 7% since the beginning of this year.
If we look further, the performance of the stock index even fell 17% from its highest point and is at its lowest level in the last three years.
Investors are worried that this situation will trigger inflation and limit the central bank's ability to cut borrowing costs. Therefore, foreign investors have been selling every day this month.
Global trade tensions, a weakening local economy, and concerns over government spending on social programs are the reasons investors are withdrawing their money one by one.
Unfortunately, several Indonesian stocks were also sold by foreigners after Morgan Stanley Capital International (MSCI) announced that it was not considering adding these stocks to one of its indexes.
Now, the banking sector is under pressure due to declining corporate income. The Indonesian government itself is now cutting spending even though this could limit public sector services and halt some infrastructure projects.
