Below is a list with tagged columns and company profiles.

Latest Reports Federal Reserve

  • Economy of Indonesia: Government Targets GDP Growth of 5.8% in 2015

    The Indonesian government is optimistic that the country’s economic growth will accelerate to 5.8 percent (year-on-year) in 2015 from an expected growth pace of 5.5 percent in 2014. The key to next year’s improved gross domestic product (GDP) growth of Indonesia is the higher forecast for global economic growth. In 2015, the world economy is estimated to grow 3.9% (yoy), higher than the outlook for this year’s growth at 3.6 percent. As such, the government’s outlook is in line the central bank’s GDP growth forecast in the range of 5.4 to 5.8 percent.

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  • Indonesian Rupiah Down on Oil Price, Fed Meeting and Political Uncertainty

    The Indonesian rupiah exchange rate came close to the IDR 12,000 per US dollar mark on Wednesday (18/06). Based on the Bloomberg Dollar Index, Indonesia’s currency depreciated 0.87 percent to IDR 11,997 per US dollar. Bank Indonesia stated that the weakening is due to violence in northern Iraq (giving rise to a higher oil price which subsequently pressures the financial balance sheets of countries that import oil, such as Indonesia), and concern about results of the Federal Reserve meeting (17-18 June 2014).

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  • World Bank Cuts its Global Economic Growth Forecast to 2.8% in 2014

    The World Bank cut its global economic growth forecast because of the weaker outlooks for the economies of the USA, Russia and China, as well as the geopolitical tensions between Russia and Ukraine which triggered worldwide concerns. The Washington-based institution expects to see 2.8 percent of global economic growth in 2014, far below its January 2014 estimate of 3.2 percent. However, it kept its global growth forecasts for the next two years at 3.4 percent and 3.5 percent, respectively.

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  • Indonesia Susceptible to Capital Outflows due to Improving US Economy

    An improving US economy can lead to capital outflows worth IDR 130 trillion (US $11.2 billion) from Indonesia as funds are expected to flow back to the USA when interest rates are raised. Since 2009, emerging markets, including Indonesia, benefited from capital inflows amid large monetary stimulus provided by the Federal Reserve (quantitative easing as well as low interest rates). Although the stimulus was aimed at boosting the US economy, emerging markets felt the side effects (such as capital inflows and appreciating emerging market currencies).

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  • Update Indonesia's Current Account Deficit and Foreign Exchange Reserves

    Indonesian Finance Minister Chatib Basri said that the country's current account deficit, the broadest measure of international transactions, may widen in the second quarter of 2014 as many local companies engage in business expansion. Such expansion usually triggers an increased amount of imports, thus impacting on the trade balance. A widening current account deficit in the second quarter of the year is a normal trend. The balance usually improves in the third and fourth quarters.

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  • Bank Indonesia Releases the '2013 Economic Report on Indonesia'

    The central bank of Indonesia (Bank Indonesia) released its '2013 Economic Report on Indonesia' earlier this week. This report discusses in great detail both global and domestic economic dynamics as well as policy responses. The year 2013 was a year full of challenges for the Indonesian economy because of changes in global economic conditions (US Federal Reserve tapering), requiring a range of structural policy changes to steer the economy of Indonesia towards a more balanced growth and restored macroeconomic stability.

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  • Which Factors Can Influence the Performance of the Indonesian Rupiah?

    On Wednesday morning (30/04), the Indonesian rupiah exchange rate had appreciated 0.11 percent to IDR 11,536 per US dollar based on the Bloomberg Dollar Index at 9:15 local Jakarta time. On Tuesday (29/04), Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.18 percent to IDR 11,589 against the US dollar. Today's JISDOR will be released by the central bank of Indonesia around noon local Jakarta time.

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  • IMF: Asia Continues to Be the Engine of Global Economic Growth

    The International Monetary Fund (IMF) assesses that the Asian region is still the world's most dynamic region in terms of economic growth. The IMF expects that Asia's economic growth will accelerate to 5.4 percent in 2014 despite the ongoing US Federal Reserve tapering of asset purchases. However, the IMF continued to stress the need for further structural reforms in Asia in an attempt to avert the negative impact of US tapering and future interest rate hikes. In 2013, the Asian region grew 5.2 percent.

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  • Economic Growth of Indonesia in 2014: Opportunities and Challenges

    Indonesia's Finance Minister Chatib Basri is optimistic that Indonesia's economic growth can reach 5.8 to 6.0 percent in 2014. According to Basri, three factors support this expectation: strong household consumption, an improving global economy, and the impact of Indonesia's legislative and presidential elections (scheduled for April and July 2014). However, one of the biggest challenges for the Indonesian government will be to offset the impact of further US Federal Reserve tapering and US interest rate hikes in 2015 and 2016.

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  • Indonesia Investments' Newsletter of 23 March 2014 Released

    On 23 March 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as the impact of the Federal Reserve's tapering and interest rate on the financial markets of Indonesia, infrastructure development, the biodiesel industry, car sales, a World Bank report, and more.

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Latest Columns Federal Reserve

  • Despite Crimea and Fed Concerns, Indonesian Rupiah up on Jokowi Effect

    The Indonesian rupiah exchange rate continued its impressive rebound in 2014, supported by Indonesia's improving economic fundamentals as well as increased political certainty due to the nomination of Joko Widodo (Jokowi) as the main opposition party's (PDI-P) presidential candidate. As such, the 'Jokowi effect' managed to offset negative market sentiments brought on by the (disputed) referendum in Crimea that showed that 97 percent of voters support a split from Ukraine. This intensified political tensions between the West and Russia.

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  • Bank Indonesia: Trade Balance of Indonesia Expected to Improve in 2014

    The central bank of Indonesia (Bank Indonesia) believes that the USD $430 million trade deficit that was recorded in January 2014 is a normal result taking into account the implementation of the ban on exports of unprocessed minerals (which reduces exports of materials such as copper and nickel) and seasonal trends as exports are always lower in January than in December due the end of winter peak demand for raw materials and ongoing contractual negotiations at the beginning of each year.

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  • Indonesian Rupiah Exchange Rate to Stabilize Near Current Level

    The Indonesian rupiah exchange rate had depreciated (0.15 percent) to IDR 11,665 per US dollar on Thursday (27/02), 15:00 local Jakarta time, based on the Bloomberg Dollar Index. Governor of Bank Indonesia Agus Martowardojo stated yesterday to expect the currency to stabilize near current levels in line with its economic fundamentals ahead of looming further Federal Reserve tapering. Analysts estimate that Indonesia's trade balance might deteriorate in January 2014 as the impact of the mineral-ore export ban kicks in.

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  • Optimism about the Performance of the Indonesian Rupiah Rate in 2014

    The central bank of Indonesia (Bank Indonesia) is optimistic that the country's currency will continue to appreciate against the US dollar in the first quarter of 2014. Executive Director at the Economic and Monetary Policy Department of Bank Indonesia Juda Agung said that there are two factors that impact positively on the performance of the Indonesian rupiah exchange rate: the improved global economy and strengthening domestic economic fundamentals. However, Agung declined to estimate the value of the rupiah by the end of Q1-2014.

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  • Both Indonesia's Rupiah and Stock Index Strengthen on Wednesday

    Positive market sentiments stemming from Wall Street pushed Indonesia's benchmark stock index (known as the Jakarta Composite Index or IHSG) further up on Wednesday (12/02). Even though technical indicators (such as the bollinger band) suggest that the majority of Indonesian stocks are close to the overbought area, it did not prevent investors from stock trading. The appreciating rupiah exchange rate, rising Asian indices and positive openings in Europe all contributed to the IHSG's 0.58 percent gain to 4,496.29 points.

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  • Is Foreign Confidence in Indonesia’s Capital Market Restored in 2014?

    In 2013, Indonesia experienced a rough year in terms of stock trading. The world was shocked by Ben Bernanke’s speech in late May 2013 in which he hinted at an end to the Federal Reserve’s large monthly USD $85 billion bond-buying program known as quantitative easing. Through this program, cheap US dollars found their way to lucrative yet riskier assets in emerging economies, including Indonesia. But when the end of the program was in sight, the market reacted by pulling billions of US dollars from emerging market bonds and equities.

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  • Analysis of Indonesia's 5.78% Economic Expansion in 2013

    On Wednesday (05/02), Statistics Indonesia (BPS) reported that the economy of Indonesia expanded 5.78 percent in 2013. This result implies that in 2013 Indonesia experienced the slowest pace of GDP growth since its 4.63 percentage growth in 2009. However, this slowing growth was basically self-inflicted as both the Indonesian government and central bank (Bank Indonesia) used various monetary and fiscal policies to curb economic expansion in order to tackle several financial issues.

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  • Inflation Update January 2014: Analysis of Indonesia's 1.07% of Inflation

    The pace of Indonesia's monthly January inflation rate was higher in 2014 than in the same month during the past five years. This relatively high inflation rate this year, recorded at 1.07 percent, was caused by severe rainfall and floods in several parts of Indonesia (particularly in the cities of Jakarta and Manado) amid the peak of the rainy season. These weather-related circumstances impacted on prices of food products as distribution channels were disrupted, thus giving rise to increasing prices. Annual inflation, however, slightly eased.

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  • Jakarta Composite Index Falls 0.74% due to External and Internal Issues

    Jakarta Composite Index Declines 0.74% due to External and Internal Issues

    The benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) was again affected by profit taking after market participants saw falling indices on Wall Street and in Europe at the end of last week due to various negative sentiments including the Federal Reserve's tapering issue, slowing Chinese manufacturing and the release of several global companies' financial reports that were below expectation. Moreover, the rupiah exchange rate continued to depreciate while Asian indices were down on Monday (03/02).

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  • Despite Positive Domestic Data Rupiah Exchange Rate Continues Depreciation

    Despite the release of positive macroeconomic data on Monday (03/02), Indonesia's rupiah exchange rate depreciated 0.22 percent to IDR 12,240 per US dollar based on the Bloomberg Dollar Index. China’s Manufacturing PMI fell to a six-month low of 50.5 in January and put pressure on stocks and currencies in emerging markets. Moreover, the Federal Reserve's further reduction of its quantitative easing program (to USD $65 billion per month) continues to strengthen the US dollar at the expense of emerging currencies.

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