The central bank of Indonesia (Bank Indonesia) estimates that Indonesia’s inflation rate in March will be around 0.3 to 0.4 percent month-to-month (m/m), slightly higher than its earlier forecast of around 0.28 percent (m/m). Later this week, Statistics Indonesia will release the country’s March inflation figure. In February inflation eased to 6.29 percent year-on-year (y/y) - from 6.96 percent (y/y) in the preceding month - amid declining fuel and food prices despite some inflationary pressures caused by higher rice prices.

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Nilai tukar rupiah mengawali minggu ini dengan posisi kuat karena dollar Amerika Serikat (AS) melemah akibat ketidakjelasan mengenai waktu kenaikan suku bunga AS. Kontras dengan dugaan awal, meeting Federal Reserve yang terakhir (diadakan 17-18 Maret) mengindikasikan bahwa belum akan ada kenaikan suku bunga dalam waktu singkat di negara dengan ekonomi terbesar. Hal ini mendorong meningkatnya minat untuk aset-aset pasar negara berkembang. Apalagi, Pemerintah Indonesia dan Bank Indonesia berjanji akan menjaga stabilitas rupiah.

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Bank Sentral Indonesia (Bank Indonesia) memutuskan untuk tetap menjaga suku bunga acuannya pada 7,5% sebagai hasil keputusan pertemuan Dewan Gubernur Bank Indonesia (BI) yang dilakukan hari ini. Suku bunga overnight deposit facility dan suku bunga lending facility dipertahankan masing-masing 5,5% dan 8%. BI menganggap bahwa kondisi suku bunga saat ini sesuai dengan targetnya untuk mendorong inflasi ke dalam target antara 3,0% sampai 5,0% dalam basis year on year (y/y) di tahun 2015 dan mengurangi defisit neraca transaksi berjalan Indonesia antara 2,5% sampai 3,0% dari produk domestik bruto (PDB).

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Setelah serangkaian data ekonomi yang baik (terutama data tenaga kerja di Amerika Serikat) pasar menduga Federal Reserve akan menaikkan tingkat suku bunganya pada kuartal kedua atau ketiga tahun ini dan karenanya dollar Amerika Serikat (AS) dapat bullish momentum (hampir menjadi posisi tertinggi selama 11 tahun terakhir). Karena prediksi yield yang lebih tinggi di AS, modal kembali masuk ke negara dengan ekonomi terbesar di dunia ini. Pada saat yang sama, hal ini menimbulkan kerugian besar pada mata uang di negara-negara berkembang, termasuk nilai tukar rupiah yang turun 6% terhadap dollar AS pada tahun ini.

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The central bank of Indonesia (Bank Indonesia) expects that the country’s trade balance will show a USD $500 million surplus in February 2015 on the back of increased manufacturing exports, the higher price of crude palm oil, and lower oil imports. In January, Indonesia’s trade balance recorded a USD $710 million surplus, divided into a USD $748 million surplus in the non-oil & gas trade balance and a USD $38.6 million deficit in the oil & gas trade balance.

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According to the latest survey of Bank Indonesia (the central bank of Indonesia), the country’s January retail sales accelerated 10.4 percent year-on-year (y/y), up from the 3.3 percentage point growth pace (y/y) in the preceding month. Retail sales in the first month of the year in Southeast Asia’s largest economy accelerated because of higher sales of information & communication equipment (+29.9 percent y/y) as well as food, beverages & tobacco products (+15.1 percent y/y).

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Bank sentral Indonesia (Bank Indonesia) mengumumkan pada hari Jumat (06/03) bahwa cadangan devisa negara bertambah menjadi 115,5 miliar dollar AS pada akhir Februari 2015, naik dari 114,2 miliar dollar AS di bulan sebelumnya. Peyebab utama pertumbuhan ini adalah kenaikan pendapatan ekspor minyak & gas, yang melebihi pembayaran hutang luar negeri Pemerintah. Berita ini menyebabkan sentimen positif di pasar dan berkontribusi pada rekor tertinggi pada penutupan Indeks Harga Saham Gabungan (IHSG) pada hari Jumat.

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One day after the surprise interest rate cut by Indonesia’s central bank, Indonesian stocks surge to a new record level led by interest rate sensitive stocks (such as financial institutions, construction firms and property firms) while the rupiah and government bonds are weakening. Yesterday (17/02), Bank Indonesia shocked markets by lowering its key interest rate (BI rate) and deposit facility rate (Fasbi) by 25 basis points, each, to 7.50 percent and 5.50 percent, respectively. Easing monetary policy is back in fashion among the region’s central banks.

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The central bank of Indonesia (Bank Indonesia) announced on Friday (13/02) that Indonesia’s current account deficit - the broadest measure of trade in goods and services - improved to 2.81 percent of gross domestic product (GDP), or USD $6.2 billion, in the fourth quarter of 2014 (from a revised 2.99 percent of GDP in the preceding quarter). The full-year 2014 deficit amounted to USD $26.2 billion, equivalent to 2.95 percent of GDP from a (revised) deficit of USD $29.1 billion (3.18 percent of GDP) in 2013.

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Benedict Bingham, Senior Resident Representative untuk Indonesia di International Monetary Fund (IMF), memperkirakan bahwa bank sentral Indonesia (Bank Indonesia) akan terus berkomitmen pada kebijakan moneter yang lebih ketat dalam upaya untuk menjaga fundamental fiskal nasional di tengah tekanan eksternal. Terlepas dari pertumbuhan ekonomi global yang lamban, kenaikan suku bunga di AS (tahun ini) diperkirakan mempengaruhi Indonesia karena akan mendorong aliran keluar modal dari pasar-pasar berkembang.

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Indonesia's main stock index (IHSG) was able to continue its rise on Thursday (11/07) despite mixed markets in the United States and Europe, that were waiting for the release of the Federal Reserve minutes, on the previous day. The minutes and Ben Bernanke's speech indicate that the bond-buying program will be continued for a while and this made investors decide to buy Indonesian assets, particularly large cap stocks such as Unilever Indonesia, Bank Mandiri and Indocement Tunggal Prakarsa.

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Today, Bank Indonesia surprised many analysts and investors by raising its benchmark interest rate by 50 bps to 6.50 percent. Indonesia's central bank assessed that this measure is the correct one with regard to supporting the IDR rupiah (which is one of the worst Asian currencies against the US dollar this year) and to fight higher inflation after the government decided to cut fuel subsidies in June. It expects inflation to peak in July at about 2.3 percent (month to month) but to moderate soon afterwards.

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Indonesia's central bank (Bank Indonesia) expects that economic growth of Indonesia in 2013 will not meet the government's target as has been set in the revised State Budget (APNB-P). Last month, both government and parliament of Indonesia agreed on a revised GDP growth assumption of 6.3 percent. However, Bank Indonesia believes that, due to slowing domestic consumption and investments in the current global economic context, the growth is more likely to fall between 5.8 and 6.2 percent.

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Similar to the Jakarta Great Sale event, Indonesia's main stock index (IHSG) trades its stocks at low prices as foreign investors have sold large parts of their Indonesian stock assets in recent weeks. Last week, foreign investors sold IDR 4.9 trillion (about USD $492.4 million), meaning that this year's accumulated foreign net buying has evaporated. Will these sales continue? Yes, I think so. Foreigners have invested about IDR 144 trillion in Indonesia's capital markets between 2007 and Q1-2013. As such, there is still plenty to sell.

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Concerns about an ending to the Federal Reserve's quantitative easing program and falling industrial activity in China as well as China's credit crisis made many investors decide to sell assets on stock markets around the world on Thursday (20/06). Indonesia's main stock index (IHSG) was just one of the many victims of this global unrest. The index weakened 3.68 percent to 4,629.99 points as foreign investors mostly sold their Indonesian assets, resulting in significant lowered share prices of Indonesia's big cap companies.

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On Friday (14/06), the main stock index of Indonesia (IHSG) jumped 3.32 percent to 4,760.74 points as financial market participants were optimistic about the effects of the higher central bank interest rate that was announced the day before. Moreover, Indonesia's IHSG was supported by a green wave across Asian stock markets, which was partly due to a strong rebound in markets in the United States on Thursday (13/06). Stocks in Indonesia's banking and property sectors were the top-gainers on Friday's trading day.

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Less than 24 hours after having raised the overnight deposit facility rate (known as Fasbi) by 25 bps to 4.25 percent, Indonesia's central bank (Bank Indonesia) also raised its benchmark interest rate (known as the BI rate) by 25 bps to 6.0 percent. Both these policy responses were conducted in order to support the IDR rupiah, which is one of the worst performing Asian currencies against the US dollar in 2013. Indonesia's central bank expects growing inflationary pressures as the Indonesian government intends to cut fuel subsidies this June.

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On the very last trading day of May (31/05), Indonesia's main stock index (IHSG) closed at 5,068.63 points. During the month, the index showed a volatile performance as it reached its peak at 5,251.29 and its low at 4,907.59 points. Overall, the IHSG continued to rise in May despite various negative sentiments. Foreign investors recorded a net sell of IDR 7.9 trillion (USD $806.12 million). However, optimistic domestic investors kept Indonesia's index in the green zone.

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Last week, Indonesia's main stock index (IHSG) moved remarkably well. The index managed to set a new record high at 5145.68 points on Friday (17/05/13) as it was pushed up by its strongest pillar of support, the consumer sector. Indonesia's consumer sector rose as much as 8.23 percent last week, while the largest obstacle to growth was the country's mining sector, which experienced a correction of 3.31 percent. What are the underlying reasons of last week's gain towards yet another record high? And is it sustainable?

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Indonesia's central bank (Bank Indonesia or BI) announced on Wednesday (15/05/13) that the country's external balance has improved during Q1-2013 as non-oil and gas trade were up. Indonesia's current account deficit stood at USD $5.3 billion (2.4 percent of GDP) in Q1-2013, compared to the previous quarter's deficit of USD $7.6 billion (3.5 percent of GDP). Indonesia has experienced a widening trade deficit, although it recorded a trade surplus of USD $304.90 in March, the first trade surplus since September 2012.

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