Our Financial Columns offer analyses of subjects related to the Indonesian financial markets. Together, these columns - that also have high news value in the current state of the Indonesian economy - intend to provide a clear and detailed picture regarding the structure and performance of these markets.
Indonesia's global rupiah-denominated government bonds will enter the Bloomberg Barclay's Global Aggregate Index per May 2018. On Wednesday (21/02) Bloomberg announced that Indonesia's global rupiah bonds meet all criteria to become a member of the Global Aggregate Index. This decision shows the degree of rising foreign confidence in Indonesian bonds, hence in the Indonesian rupiah and the Indonesian economy as a whole.
In the first two weeks of February 2018 foreign investors aggressively sold rupiah-denominated government bonds (in Indonesian: Surat Berharga Negara, or SBN) in the secondary market. Up to 14 February 2018, foreign investors sold IDR 18.69 trillion (approx. USD $1.4 billion) worth of government bonds in February.
The central bank of Indonesia (Bank Indonesia) kept its benchmark interest rate - the BI 7-day Reverse Repo Rate - at 4.25 percent at the February Board of Governor's Meeting (14-15 February 2018). Meanwhile, it maintained the deposit facility and lending facility rates at 3.50 percent and 5.00 percent, respectively (effective per 19 February 2018).
The central bank of Indonesia (Bank Indonesia) said the country's current account deficit remained under control, albeit widening in the last quarter of 2017. Indonesia's current account deficit reached USD $5.8 billion or 2.2 percent of gross domestic product (GDP) in Q4-2017 (up from a deficit of USD $4.6 billion or 1.7 percent of GDP in the preceding quarter).
