The central bank of Indonesia (Bank Indonesia) announced that the country's foreign exchange reserves fell to USD $111.5 billion at the end of November 2016, from USD $115.0 billion in the preceding month. The USD $3.5 billion decline was caused by Bank Indonesia's efforts to stabilize the rupiah exchange rate as well as the government's external debt repayments. Despite the decline, Bank Indonesia regards the current level of forex reserves as healthy.

Read more ›

The central bank of Indonesia (Bank Indonesia) informed that around IDR 30 trillion (approx. USD $2.26 billion) of capital outflows from Indonesia occurred after Donald Trump was chosen as 45th US president in November. His victory caused a high degree of uncertainty about future US political and economic policies, while markets also expect to see a stronger US economy as Trump is expected to focus on the interests of the USA, and not so much on its impact on the international community.

Read more ›

The central bank of Indonesia (Bank Indonesia) announced that the nation's current account deficit (CAD) eased to 1.83 percent of gross domestic product (GDP) in the third quarter of 2016, improving from a revised 2.2 percent of GDP deficit in the preceding quarter. Bank Indonesia further informed that the CAD will most likely remain in the range of 2.0 - 2.5 percent of GDP in full-year 2016. In 2015 Indonesia's CAD eased to 2.1 percent of GDP. Since late-2011 Southeast Asia's largest economy has had to cope with a wide current account deficit.

Read more ›

The Financial System Stability Committee (in Indonesian: Komite Stabilitas Keuangan, or KSSK) stated that Indonesia's economy is stable. The KSSK further informed that it will raise efforts to enhance market confidence in Indonesia's financial sector. The KSSK, an Indonesian institution that is responsible for preventing financial crises, consists of a selection of key policymakers from the Finance Ministry, Bank Indonesia, Financial Services Authority (OJK) and Deposit Insurance Corporation (LPS).

Read more ›

The central bank of Indonesia (Bank Indonesia) expects Indonesia's current account deficit to have improved to below 2 percent of the country's gross domestic product (GDP) in the third quarter of 2016. This is good news as a wide (and structural) current account deficit is considered a financial weakness because it means the country is building up liabilities to the rest of the world. Ever since late-2011 Indonesia has been suffering a wide current account deficit. This is particularly attributed to the globe's low commodity prices after 2011.

Read more ›

According to the latest survey of Indonesia's central bank (Bank Indonesia), consumer confidence in Southeast Asia's largest economy fell 3.3 points to 110 in September 2016 (a reading above 100.0 indicates optimism). Consumer confidence somewhat weakened as the Indonesian people expect upward price pressures at the year-end, specifically rising prices of processed food, beverages, cigarettes, tobacco and groceries. Meanwhile, respondents also expect to put less money in savings in the next six months.

Read more ›

Agus Martowardojo, Governor of Indonesia's central bank (Bank Indonesia), says there remains room for monetary easing in Southeast Asia's largest economy in the last few months of 2016, provided that both the domestic and global context remain conducive. However, Martowardojo did not specify what this monetary easing exactly entails: a lower key interest rate, cutting the primary minimum statutory reserves (in Indonesian: giro wajib minimum primer), or macro-prudential policy easing? Whatever the move may be, it will for sure be data-dependent, Martowardojo emphasized.

Read more ›

The central bank of Indonesia (Bank Indonesia) reported that the country's foreign exchange reserves rose by USD $2.1 billion to USD $113.5 billion in August 2016 on the back of tax revenues, oil and gas export earnings, the withdrawal of public foreign debt, and the selling of foreign currency-denominated Bank Indonesia Securities (SBBIs). Inflows of foreign currency exceeded the amount that Indonesian authorities had to pay for foreign debt settlements and maturing SBBIs.

Read more ›

At the latest policy meeting, Indonesia's central bank (Bank Indonesia) not only adopted a new benchmark monetary tool (the BI seven-day reverse repo rate) but also announced that it cut its forecast for economic growth in 2016. Earlier, Bank Indonesia estimated Indonesia's GDP growth in full-year 2016 in the range of 5.0 - 5.4 percent (y/y). However, it slightly cut its projection to the range of 4.9 - 5.3 percent (y/y) due to the government's decision to curtail expenditure by IDR 133.8 trillion (approx. USD $10.1 billion).

Read more ›

The central bank of Indonesia (Bank Indonesia) announced today (14/07) that the nation's foreign exchange reserves rose by USD $6.2 billion to USD $109.8 billion in June 2016. The rise was supported by foreign exchange receipts, primarily from the issuance of government US dollar-denominated bonds, the auction of Bank Indonesia foreign exchange bills, tax revenues, oil & gas export earnings, as well as the withdrawal of foreign-denominated government loans.

Read more ›

Indonesia's current account deficit, which caused much alarm among the investor community, is expected to ease to about 2.5 percent of gross domestic product (GDP) in the second half of 2013. This assumption is supported by Indonesia's central bank and various analysts. The country's current account deficit reached USD $9.8 billion or 4.4 percent of GDP in Q2-2013. In combination with the weakening rupiah, higher inflation and the possible end to the Federal Reserve's quantitative easing program, investors have been pulling money out of Indonesia.

Read more ›

After market participants had time in the weekend to think over the 'rescue packages' of the Indonesian government and central bank (Bank Indonesia) that were released on Friday (23/08), they seemed unconvinced about the short-term impact of the packages. As a result, Indonesia's main stock index (IHSG) fell 1.18 percent to 4,120.67 points on Monday (26/08), which is the IHSG's lowest level since 7 September 2012. The Indonesian rupiah gained 0.06 percent to IDR 10,841 (Bank Indonesia's mid rate).

Read more ›

Despite the announcement of an economic policy package aimed at overcoming the impact of global financial turmoil, Indonesia's main stock index (IHSG) was not able to end the week on a positive note, while the value of the rupiah on the spot market depreciated 1.68 percent to IDR 11,058 per US dollar on Friday (23/08) amid a majority of strengthening Asian currencies, including the Indian rupee (0.67 percent) and the Thai baht (0.28 percent). Based on Bank Indonesia's mid rate, the rupiah fell 4.4 percent against the US dollar to IDR 10,848 last week.

Read more ›

Similar to the Indonesian government, Indonesia's central bank also announced a fiscal policy package to support sustainable nationwide economic growth by curbing inflation, maintaining a more sustainable balance of payments as well as strengthening financial system stability. These additional policies are expected to synergise with the policy package unveiled by the government on Friday (23/08). These measures were taken as both the rupiah and Indonesia's main stock index (IHSG) are in a downward spiral.

Read more ›

The rebound that happened in the first session of Friday's trading day (23/08) gave hope that Indonesia's main stock index (IHSG) would end the disastrous week on a positive note. However, in the second session of the day market participants began selling Indonesian assets causing the index to fall again, although the fall was limited. In line with the Asian region, the index lost 0.04 percent to end at 4,169.83 points. Even the highly anticipated 'rescue package' of the Indonesian government was not able to support the index.

Read more ›

Concerns about Indonesia's weakening rupiah intensified on Wednesday (21/08) as the currency is now balancing on the psychological boundary of IDR 11,000 per US dollar. The rupiah continued its downward spiral today although its decline was limited due to the intervention of Indonesia's central bank (Bank Indonesia) that started selling US dollars again in an effort to support the rupiah. According to data compiled by Reuters, the rupiah has now fallen 10.7 percent this year.

Read more ›

On Tuesday (20/08), Indonesia's benchmark stock index (IHSG) continued its decline with its fourth consecutive day of losses. Amid major concerns about Indonesia's economic growth, high inflation, tighter monetary policy and current account deficit, the IHSG fell 3.21 percent to 4,174.98 points. It means that the index now stands about 21 percent lower than its record peak in May 2013. Foreign investors have been pulling money out of the Indonesian market. According to Bloomberg, about USD $255 million has been retracted in the last two days.

Read more ›

After two days of growth, Indonesia's main stock index (IHSG) became victim of profit taking on Thursday (15/08). Particularly domestic investors were eager to sell their Indonesian assets. Falling indices on Wall Street on Wednesday (14/08) in combination with global uncertainty about the end of the Federal Reserve's quantitative easing program made a negative impact on Asian stock indices, including the IHSG. Indonesia's central bank's decision to keep its benchmark interest rate at 6.50% was well-received by most investors.

Read more ›

The foreign exchange reserves of Indonesia keep on falling from its historical peak of USD $124.64 billion in August 2011 to USD $92.67 billion at the end of July 2013. This development seems to highlight long-standing weaknesses in Indonesia's sovereign's external finances, as credit agency Fitch Ratings detected on several occasions before. The republic of Indonesia is currently characterized by four deficits, to wit a current account deficit, a balance of payments deficit, a trade balance deficit and a fiscal deficit.

Read more ›

After Wall Street turned back into the green zone on Tuesday (13/08) and was accompanied by continued rising stock indices in Europe, it provided good support for Asian stock indices on Wednesday (14/08), including Indonesia's main stock index (IHSG). Indonesian mining commodities and plantation stocks fell but these losses were offset by rising big cap stocks (particularly finance stocks) and speculation that Indonesia's central bank will keep its benchmark interest rate (BI rate) at 6.50 percent.

Read more ›