TEMPO.CO, Jakarta – The market has been responding negatively over the parliament's structure, which is dominated by pro-Prabowo parties' coalition. In yesterday's currency trade, the rupiah experienced a freefall after the Red and White Coalition managed to grab the People's Consultative Assembly (MPR) speaker post.
The record completed the rupiah's downtrend over the last couple of weeks. "Conditions in the parliament have built anxiety regarding the fate of the new government," foreign exchange analyst Lindawati Susanto said yesterday.
David Sumual, an analyst from Bank Central Asia, said that for the short run investors will wait for Joko Widodo's inauguration as president. David said he has not seen signs of attempts to tackle Jokowi. "However, if it happens, the market sentiment will be negative. Investors will hesitate to invest in the medium and long term," David told Tempo yesterday.
Meanwhile, chairman of the Indonesian Minerals Employers Association, Poltak Sitanggang, said that market players were quite optimistic on Indonesia's economic outlook after Jokowi won the presidential election, as reflected in foreign net buys that totaled at toRp 57.26 trillion post-election.
However, the capital inflows did not last long. Massive capital outflows began after the Regional Election bill—supported by Prabowo's—was passed. The negative sentiment from politics reached its climax when the Red and White Coalition got hold of the House of Representative's (DPR) speaker position.
Poltak said this phenomenon is a sign that extensive political stirs in the parliament would trigger investors' distrust, as well as threatening business-to-business and investment certainties in Indonesia. "For businesses, certainty is an aspect that cannot be bargained for," he said.
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