Emerging market assets in Asia remained under pressure on Thursday (16.05.2019), with risk appetite being particularly undermined by rising concerns over USA-China trade tensions.

Read more ›

The Indonesian rupiah made a stable performance against the US dollar in February 2019. The benchmark JISDOR rate of Bank Indonesia ended the second month of the year at the position of IDR 14,062 per US dollar, appreciating modestly from the level of IDR 14,072 per US dollar at the last trading day of January 2019.

Read more ›

In the month of December 2018 the Indonesian rupiah weakened 0.99 percent from IDR 14,339 per US dollar on the last trading day of November 2018 to IDR 14,481 per US dollar on the last trading day of December 2018 (based on Bank Indonesia’s benchmark JISDOR rate).

Read more ›

On Monday (07/01) Indonesia Investments released the December 2018 edition of its monthly research report. The report aims to inform the reader of the key political, economic and social developments that occurred in Indonesia in the month of December 2018 and also touches upon key international developments that impacted on the Indonesian economy.

Read more ›

Although we predicted in our latest research report that Indonesia's central bank (Bank Indonesia) would raise its benchmark interest rate at the two-day monetary policy meeting on 14-15 November 2018, we were still taken by surprise after the decision was announced. After all, the rupiah had appreciated significantly in the days after the launch of our October research report.

Read more ›

Indonesia’s current account deficit is expected to widen to the range of 3.30 – 3.40 percent of the country’s gross domestic product (GDP) in the third quarter of 2018, above the 3.0 percent of GDP threshold that is usually considered to separate a sustainable from an unsustainable deficit.

Read more ›

The central bank of Indonesia (Bank Indonesia) left its benchmark interest rate (the BI 7-Day Reverse Repo Rate) unchanged at 5.75 percent at the October 2018 policy meeting (22-23 October). Meanwhile, the deposit facility and lending facility rates were kept at 5.00 percent and 6.50 percent, respectively.

Read more ›

On Monday (08/10) Indonesia Investments released the September 2018 edition of its monthly research report. The report aims to inform the reader of the key political, economic and social developments that occurred in Indonesia in the month of September 2018 and also touches upon key international developments that impacted on the Indonesian economy.

Read more ›

While most of the focus, rightfully, remains centered on the disaster in Central Sulawesi where presumably thousands of people have lost their lives due to a big earthquake and devastating tsunami, it is worth keeping an eye on the Indonesian rupiah exchange rate which is again facing heavy pressures and has now slipped beyond the psychological boundary of IDR 15,000 per US dollar.

Read more ›

The central bank of Indonesia (Bank Indonesia) raised its benchmark interest rate (the seven-day reverse repo rate) by 25 basis points (bps) to 5.75 percent at the two-day policy meeting that was concluded on Thursday (26-27 September 2018). Also the deposit facility and lending facility rates were raised by 25 bps to 5.00 percent and 6.50 percent, respectively.

Read more ›

After Indonesia’s political year of 2014 ended, financial institutions expect to experience better times in 2015. Last year, economic growth of Indonesia slowed to a five-year low of 5.02 percent (y/y) due to weak exports, the high domestic interest rate environment, and political uncertainties caused by Indonesia’s legislative and presidential elections. This year, however, economic growth is expected to accelerate - albeit slightly - implying stronger purchasing power. One of the businesses that will profit is mutual fund management.

Read more ›

On March 31, 2015, Bank Indonesia issued regulation number 17/3/PBI/2015 concerning Mandatory Use of Rupiah in the Territory of Indonesia (BI Regulation). In the much discussed Law number 7 of 2011 concerning Currency the mandatory use of rupiah in Indonesia was already regulated, however could be exempted in case the contract parties had agreed in writing to the terms of payment in a currency other than rupiah. Under the new BI regulation the terms on the use of foreign currencies are further restricted. In this column we discuss the most important changes based on the BI Regulation.

Read more ›

Over the past week, the Indonesian rupiah continued to appreciate against the US dollar. Based on the Bloomberg Dollar Index, the rupiah appreciated 0.07 percent to IDR 12,850 per US dollar on Friday (17/04). Only a month ago, investors and policymakers were alarmed when the rupiah touched IDR 13,245 per US dollar, a 17-year low. This column discusses the factors that caused the strengthening of the rupiah in recent weeks. However, amid looming further monetary tightening in the USA, this development should be short-term only.

Read more ›

When we look at market activity in the Indonesian rupiah, some very clear trends have started to emerge. When viewed against the US dollar the rupiah has seen pronounced weakness over this time frame. Many investors have started to view this activity as overdone and we have started to see analyst forecasts calling for more strength in the rupiah over the next few months. But there are also arguments that can be made against this outlook and it will be important for those investing in Indonesian assets to understand some of these factors, so that proper positioning can be undertaken.

Read more ›

The central bank of Indonesia (Bank Indonesia) stated that, besides global volatility caused by uncertainty about the timing of higher US interest rates, the rupiah has been - and remains - under pressure due to Indonesia’s increasing private sector debt and the wide current account deficit. Moreover, as subsidiaries of multinational companies in Indonesia tend to send back dividends to the foreign parent companies in the second quarter (implying rising US dollar demand), the rupiah is plagued by additional pressures up to June.

Read more ›

Indonesia’s consumer price index fell for the second consecutive month in February 2015, recording deflation of 0.36 percent month-on-month (m/m) in February, while on an annual basis Indonesian inflation eased to 6.29 percent (y/y), down from 6.96 percent (y/y) in the preceding month. Inflationary pressures declined primarily on the back of lower prices of chili peppers and fuel. Easing inflation in Southeast Asia’s largest economy may provide room for Indonesia’s central bank (Bank Indonesia) to cut interest rates further this year.

Read more ›

The Indonesian rupiah exchange rate continued to depreciate on Monday (02/03). According to the Bloomberg Dollar Index, Indonesia’s currency depreciated 0.30 percent to IDR 12,970 per US dollar, a six-year low. Apart from general bullish US dollar momentum in recent months (amid monetary tightening in the USA), the rupiah weakened due to Bank Indonesia’s signals that it tolerates a weaker currency in a move to boost exports (limiting the country’s current account deficit), and due to China’s interest rates cut.

Read more ›

The Indonesian rupiah strengthened on Monday (16/02) as the country’s twin current account and trade balances improved, while the US dollar weakened on disappointing US retail sales and on optimism that Greece will remain a member of the Eurozone. Meanwhile, Indonesia's Finance Ministry held a successful auction today in which it sold IDR 12 trillion (USD $942 million) of conventional bonds. Based on the Bloomberg Dollar Index, Indonesia’s rupiah appreciated 0.35 percent to IDR 12,753 per US dollar based on Monday (16/02).

Read more ›

The Indonesian rupiah exchange rate appreciated and Indonesian stocks rose on Wednesday (04/02) on the back of rallying oil prices, a successful bond auction, easing tensions in Europe, and weak US factory orders. Based on the Bloomberg Dollar Index, Indonesia’s rupiah appreciated 0.21 percent to IDR 12,630 per US dollar on Wednesday (04/03). Meanwhile, the benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) climbed 0.45 percent to 5,315.28 points.

Read more ›

Positive macroeconomic data of Indonesia - involving the significantly lower trade deficit in 2014 and easing inflation - had a good impact on the Indonesia rupiah exchange rate on Tuesday (03/02) although prior to closing the currency somewhat slid after Australia's central bank cut its interest rates causing speculation of further policy easing around the Asia Pacific region in a move to support sluggish growth and avert deflation. Most emerging Asian currencies strengthened on Tuesday against the US dollar on stronger risk appetite.

Read more ›