The central bank of Indonesia (Bank Indonesia) announced that the country's foreign exchange reserves rose USD $4.7 billion to the level of USD $127.76 billion at the end of July 2017. Growth of forex assets was primarily attributed to foreign exchange receipts, including the government's issuance of global bonds, tax revenues and government oil & gas export proceeds. Lastly, the auction of Bank Indonesia foreign exchange bills also added forex receipts.

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In local Indonesian media it is reported that Indonesian President Joko Widodo has given his blessing to the central bank (Bank Indonesia)'s plan to redenominate the rupiah. Bank Indonesia has already prepared a draft bill on the redenomination of the Indonesian Rupiah with the aim to improve economic efficiency and to create smoother commercial transactions. While the rupiah value would remain unchanged, the draft bill eyes to remove the last three zeros on all rupiah bills and coins.

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Indonesia's central bank (Bank Indonesia) concluded its Board of Governors Meeting later than usual on Thursday evening (20/07). However, there were no surprises. At the July policy meeting Bank Indonesia decided to keep its benchmark interest rate - the 7-day reverse repurchase rate - at 4.75 percent, in line with analyst estimates. Meanwhile, the deposit facility and lending facility were kept at 4.00 percent and 5.50 percent, respectively, effective per 21 Juli 2017.

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Since November 2016 we had seen six consecutive months of rising foreign exchange reserves in Indonesia. However, this trend ended in June 2017. The central bank of Indonesia (Bank Indonesia) announced on Friday (07/07) that the nation's foreign exchange assets fell to USD $123.09 billion last month, from USD $124.95 billion in May 2017 (which was an all-time record high level).

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The central bank of Indonesia (Bank Indonesia) expects Indonesia's inflation rate to rise to 4.36 percent year-on-year (y/y) by the end of 2017, a significant jump compared to the 3.02 percent (y/y) inflation rate in 2016 but still within the initial target range of Bank Indonesia (that is set at a wide range of 3 - 5 percent y/y). According to the latest data from Indonesia's Statistics Agency (BPS), Indonesia's annual inflation rate rose to 4.33 percent (y/y) in May, up from 4.17 percent (y/y) in the preceding month.

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The central bank of Indonesia (Bank Indonesia) announced the country's foreign exchange reserves rose by USD $1.7 billion to reach the new record high of USD $124.95 billion at the end of May 2017. Growth of Indonesia's foreign exchange assets was attributed to foreign exchange receipts (mainly originating from tax revenues and government oil & gas export earnings), as well as to Bank Indonesia's foreign exchange bills auction.

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Starting from March 5, 2018, Indonesian citizens as well as foreigners need to be a bit more careful when bringing foreign-denominated cash money into Indonesia. A new Bank Indonesia regulation sets a IDR 1 billion (approx. USD $75,000) ceiling on the total amount of foreign cash money an individual can bring into Indonesia.

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Sugeng, Deputy Governor of Indonesia's central bank (Bank Indonesia),  confirmed on Monday morning (08/05) that his institution has recently been intervening in the foreign exchange market in an effort to limit sharp rupiah appreciation. So far in 2017 the Indonesian rupiah has appreciated 1.11 percent against the US dollar with most of the rupiah's advance stemming from the first month of the year.

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Following the announcement last year, the central bank of Indonesia (Bank Indonesia) has again stated that it is to ease the minimum statutory reserves (in Indonesian: giro wajib minimum) regulations for conventional local banks (both for rupiah and foreign-denominated currencies). With this looser approach, banks can manage their liquidity more effectively, which should lead to reduced volatility on the overnight money market ("interest rate buffer").

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The central bank of Indonesia (Bank Indonesia) said the nation's foreign exchange reserves rose to USD $121.8 billion in late March 2017 from USD $119.9 billion in the preceding month. The increase was primarily attributed to proceeds from tax collection, state revenue from the oil & gas sector, the issuance of global bonds and the auction of Bank Indonesia foreign exchange bills.

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Retail sales in May 2013 rose 1.5 percent (month to month) or 8.6 percent (year on year) in Indonesia according to a publication of Indonesia's central bank (Bank Indonesia) released on Tuesday evening (16/07). The report made a positive impact on today's trading day as stocks in Indonesia's consumer goods sector rose 2.5 percent. Indonesia's main stock index (IHSG) gained 0.75 percent to end at the level of 4,679.00 points. Foreigner investors are still mostly avoiding the Indonesian stock market, but did record a net purchase today.

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Amid widespread profit taking, Indonesia's main stock index (IHSG) was able to post another day of limited growth on Tuesday (16/07). Asian stock indices, including the IHSG, were supported by rising American stock indices on Monday (15/07). Investors seem to be confident that Q2-2013 results of various Indonesian companies are positive and therefore engaged in stock trading although foreign investors were still mostly selling their Indonesian assets. At the end of today's trading day, the IHSG rose 0.18 percent to 4,644.04.

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After finishing last week with three consecutive days of gains, Indonesia's main stock index (IHSG) reached up to 4,633.11. However, its movement is still rather volatile. Property, finance and consumption stocks were sold by investors after seeing the benchmark interest rate raised by Bank Indonesia (by 50 bps to 6.50 percent) on Thursday (11/07), while metal stocks formed the main supporter of the index at the end of the week. Trading volume in the regular market hit 5.2 trillion and foreigners recorded net purchases of IDR 288 billion.

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In line with the general trend in the Asian region, Indonesia's main stock index (IHSG) rose 0.63 percent to 4,633.11 on Friday (12/07). One of the sectoral indices that did not follow this trend was Indonesia's property sector, which fell 0.66 percent on Friday. Since early June (and in line with large capital outflows), Indonesian property shares have experienced a significant fall of about 20 percent. Moreover, Bank Indonesia's decision to raise its benchmark interest rate by 50 bps to 6.50 percent will most likely add downward pressure on the sector.

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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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