The positive investor expectations regarding the Indonesia’s economic prospects has been boosted by controlled inflation, rupiah stability and positive forecasts for economic growth which eventually reflected in the increasing Jakarta stock price index, reaching its peak on December 2004.
That higher domestic demand leading to increased imports, as well as some spill over effect due to external factors have also indirectly affected exchange rate fluctuations in 2004, which depreciated around 3.7% to reach on average Rp8.934 per USD in 2004.