News about the the results of yesterday’s Brexit vote in the UK, in which 52% of British voters chose to have their country exit the European Union, is dominating most global news headlines today. But there’s no way that their decision (which most analysts seem to think was an incredibly terrible one) could have an immediate economic impact on us all the way over here in Indonesia, right?
While it might seem reasonable to assume so, such an assumption would ignore just how crazy interconnected our global financial system really is. And, indeed, it seems like the shockwaves of Britain’s decision to leave the EU has indeed already rippled all the way out to our archipelago.
At the end of today’s first trading session, the Jakarta Composite Index (JCI) was down 110.942 points to close at 4763.367, a decrease of 2.28%.
The rupiah also took a hit, with it’s valuing dropping to Rp 13,492 to 1 USD, compared to its opening value this morning of Rp 13,156. (That’s nothing compared to what happened to the British pound, which plunged to its lowest rate since 1985 as a result of the Brexit vote).
However, an economist at Bank Central Asia (BCA), David Sumual, told Detik that the drops were nothing more than a temporary reaction to the panic hitting other global markets, many of which were down precipitously today due to the Brexit results.
Finance Minister Bambang Brodjonegoro also assured the markets that Britain’s decision to exit the EU would not have any long term effect on the Indonesian financial market.
“Every symptom in the financial sector will be temporary, and there is no issue concerning trade,” Bambang said today as quoted by Tempo.
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