BENGALURU: Indonesian equities gained the most among Southeast Asian markets on Tuesday, a day after its central bank said a previous policy was targeted to promote lending by local players, while rupiah stayed under pressure after the dollar staged a recovery.
The Jakarta Composite Index advanced 0.5 percent to hit a near two-week high, helped by a 1.2 percent gain in top lender Bank Central Asia.
At a press conference after market hours on Monday, Bank Indonesia’s acting governor referred to a July announcement of a 200 basis point cut in required reserve levels for certain banks, effective September 1, and said the policy was intended to discourage commercial banks from placing excess liquidity in the central bank’s securities and coax them into increasing lending instead.
On the forex front, the Indonesian rupiah, emerging Asia’s worst-performing currency, slipped below the key 18,000-mark.
Markets remained on tenterhooks as contradictory statements on negotiations from Washington and Tehran left the possibility of diplomatic solutions to end the five-month-old US-Iran war doubtful.
However, the lack of a clear direction helped oil prices rebound slightly from a 7 percent drop on Monday as persistent concerns about Middle Eastern supply risks remain.
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