By the end of September 2017, Indonesia's foreign exchange reserves stood at USD $129.4 billion, slightly up from USD $128.8 billion in the preceding month, hence hitting a new all-time record. Indonesia's central bank (Bank Indonesia) said this increase was primarily attributed to foreign exchange receipts from tax revenues, government oil & gas export proceeds, the withdrawal of government foreign loans as well as the auction of Bank Indonesia foreign exchange bills.

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Bank Indonesia, the central bank of Indonesia, expects the nation's gross domestic product (GDP) to accelerate modestly in the remainder of the year after having recorded slightly disappointing 5.01 percent year-on-year (y/y) growth in both the first and second quarter of 2017.

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Indonesia's retail sales declined in July 2017 in line with the return to normal consumption patterns after the Ramadan and Idul Fitri celebrations ended. This is reflected in Bank Indonesia's retail sales index that showed a 3.3 percent decline year-on-year (y/y), after a 6.3 percent (y/y) increase in the preceding month. The decline in Indonesia's retail sales occurred in both food and non-food groups.

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Per 31 October 2017 payments on Indonesia's toll roads will be done entirely non-cash, using electronic money. This policy is part of authorities' ambition to create a cashless society and is expected to speed up the payment process at the toll roads, hence easing severe traffic congestion.

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Indonesia's central bank (Bank Indonesia) said the nation's foreign exchange reserves rose to USD $128.8 billion at the end of August 2017, higher than the USD $127.8 billion one month earlier. This growth was primarily attributed to foreign exchange receipts from tax revenues and government oil & gas export proceeds, as well as auctions of Bank Indonesia's foreign exchange bills.

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The central bank of Indonesia (Bank Indonesia) is convinced that geopolitical troubles on the Korean peninsula will not impact negatively on the Indonesian rupiah exchange rate. Bank Indonesia Agus Martowardojo said he sees little impact (yet) but emphasized that the lender of last resort will continue to carefully monitor persistent tensions that have heightened after North Korea's latest nuclear test - its biggest-ever - on Sunday (03/09).

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It was not a total surprise. In fact, signs were on the wall. On Tuesday (22/08) the central bank of Indonesia (Bank Indonesia) decided to cut its benchmark BI 7-day (Reverse) Repo Rate by 25 basis points to 4.50 percent at the August 2017 policy meeting. It was the first time since October 2016 that Bank Indonesia altered its key rate. Meanwhile, the deposit facility and lending facility rates were also cut by 25 basis points, to 3.75 percent and 5.25 percent, respectively.

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Usually Bank Indonesia ends its two-day Board of Governor's meeting on a Thursday. This August, however, the monthly meeting is planned to end today (Tuesday 22 August 2017). This meeting - expected to be completed in the late afternoon or early evening - is closely watched because some believe Indonesia's central bank is prepared to cut its benchmark interest rate.

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Indonesia's central bank (Bank Indonesia) is optimistic that credit growth will accelerate in Indonesia in 2018. The lender of last resort set its credit growth forecast for 2018 at the range of 12-14 percent year-on-year (y/y), up from its 10-12 percent (y/y) growth forecast for 2017, on the back of accelerating economic growth. The Indonesian government proposes economic growth at 5.4 percent (y/y) in 2018 (possibly a too ambitious target).

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Bank Indonesia (the central bank of Indonesia) is convinced that the nation's current account deficit (CAD) will not exceed 2 percent of gross domestic product (GDP) in 2017. In the second quarter of 2017 the CAD widened to 1.96 percent of GDP (or USD $5 billion), from 0.98 percent of GDP in the preceding quarter (or USD $2.4 billion).

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Although the holy fasting month of Ramadan and subsequent Idul Fitri celebrations always provide a boost for national economic growth in Indonesia as domestic consumption tends to peak, analysts believe that it will not contribute significantly to the government's 6.3 percent GDP growth target this year. During Ramadan and Idul Fitri (known as Lebaran), Indonesian consumers generally spend more on food products, clothes, shoes, tickets for transport and hotels than in other months, and thus lead to increased economic activity.

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Worldwide, most stock indices fell on Wednesday (07/08), particularly Japan's Nikkei index, after it has been speculated that the Federal Reserve may phase out the third round of its quantitative easing program in September 2013. This program, involving a monthly USD $85 billion bond-buying package, aims to spur US economic growth while keeping interest rates low. However, one important side effect has been rising stock markets around the globe. Now the end of QE3 is in sight, investors shy away from riskier assets.

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Indonesia’s inflation rate in July 2013 was significantly higher than analysts had previously estimated. The country’s July inflation figure accelerated to 3.29 percent. On year-on-year basis, it now stands at 8.61 percent, the highest inflation rate since many years. Particularly food commodity and transportation prices rose steeply. The main reason for Indonesia's high inflation is the reduction in fuel subsidies. In late June, the government increased the prices of subsidized fuels in order to relieve the ballooning budget deficit.

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Last week (22-26 July 2013), Indonesia's main stock index (IHSG) ended 1.39 percent down at 4,658.87. The daily value of transactions on the regular market narrowed to an average of IDR 3 trillion (USD $300 million) from IDR 3.84 trillion in the previous week. Foreigners still recorded net sales amounting to IDR 92.9 billion (USD $9.3 million). Lack of positive sentiments, financial results of companies that were below expectation and the continued weakening of the rupiah against the US dollar resulted in the decline of the index.

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Indonesia's main stock index (IHSG) continued its weakening trend this week. The index fell 0.93 percent to 4,674.12 on Thursday (25/07). This downward movement today was in line with most other Asian stock indices. All sectoral indices of the IHSG weakened, except for the miscellaneous industry. Indonesian blue chips, in particular, were under pressure. Unilever Indonesia fell 3.38 percent and Bank Mandiri lost 3.37 percent. Trade was relatively quiet with value of transactions at IDR 4.5 trillion (USD $441.2 million).

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Indonesia's main stock index (IHSG) was not able to continue yesterday's rise as investors, particularly domestic investors, engaged in profit taking. Foreign investors, who were net buyers of Indonesian assets, were not able to guide the IHSG to positive territory. Mixed Asian stock indices, responding to weak Chinese data, did not support Indonesia's index. Moreover, market participants expect that the rupiah will continue its weakening trend and have begun speculating whether the benchmark interest rate (BI rate) will be raised again.

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Yesterday's rising indices on Wall Street, high expectations of companies' financial reports and positive statements regarding economic growth in China resulted in a good day at the Indonesia Stock Exchange (IDX). Indonesia's main stock index, the IHSG, rose 1.88 percent to 4,767.16 on Tuesday (23/07), even though technical indicators seemed to predict a weakening of the index. Also the continued fall of the Indonesian rupiah did not turn investors away from the market. In fact, foreign investors were net buyers of Indonesian stocks.

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The Indonesian rupiah (IDR) is experiencing one of its worst losing streaks in a decade. On Friday (19/07), the currency weakened to IDR 10,070 against the US dollar, which implies a devaluation of 4.14% in 2013 so far. The central bank of Indonesia, Bank Indonesia, does all it can to support the currency: the country's lender of last resort supplies dollars to the market triggering the reduction of foreign reserves from USD $105 million at end-May to $98 million at end-June, and raised its benchmark interest rate (BI Rate) by 50 bps to 6.50%.

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Indonesia's main stock index (IHSG) went up 0.89 percent to 4,720.44 on Thursday (18/07). The index was supported by developments in the United States. On Wednesday (17/07), Ben Bernanke spoke to the US Congress and said that the Federal Reserve is likely to continue its bond-buying program in 2013 and may gradually withdraw the quantitative easing program in 2014. But only if economic recovery of the US provides the good context. This message supported the IHSG although foreign investors continued to record a net sale.

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Starting from 1 September 2013, the minimum down payment for the purchase of a second house or apartment (bigger than 70 m²) in Indonesia will be raised to 40 percent. Indonesia's central bank (Bank Indonesia) implements this new rule to avoid a possible credit bubble in Indonesia's property sector. The country's property sector has been booming in recent years, giving rise to many new property projects, soaring profits for property companies (as well as impressive stock performance) and significantly rising property prices.

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