Below is a list with tagged columns and company profiles.

Latest Reports US Dollar

  • World Bank Report: Latest East Asia Pacific Economic Update

    In the latest edition of the East Asia Pacific Economic Update, released on Monday (13 April 2015), the World Bank revised down its economic growth forecast for developing East Asia & China to 6.7 percent year-on-year (y/y) in 2015 and 2016 from its previous assumption of 6.9 percent growth (y/y) in 2015 and 6.8 percent (y/y) in 2016. The main reason for this downward revision is the global uncertain economic context, which includes the impact of looming higher US interest rates and the appreciating US dollar.

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  • Stocks & Currency: Asian Emerging Markets Relieved after Fed Minutes

    Minutes of the Federal Reserve’s latest FOMC meeting (17-18 March), released Wednesday (08/04), show that the US central bank is divided about the timing of higher US interest rates. Several policymakers would approve such an interest rate hike in June 2015, while others would prefer to see rates increase later this year or even next year as they consider that the US economy is still not strong enough yet. However, when reading the minutes there are some signs suggesting that the institution is on course to raise its key rate this year.

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  • Forget Short Term Turmoil, the Economic Rise of Asia has just Begun!

    Investors in Asian markets should not be overly concerned about slowing economic growth in China or bullish US dollar momentum ahead of higher US interest rates as economic growth rates in this region are still significantly higher than in other parts of the world. Thanks to a burgeoning middle class segment (which constitutes a strong consumer force), Asia has great prospects for the long-term. This is the message conveyed in the words of Christophe Palumbo, Senior Business Development Manager at Aberdeen Asset Management.

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  • Rupiah Update: Weak US Jobs Data Supports Indonesian Assets

    Indonesian stocks and the rupiah are performing well on Monday’s trading day (06/04) after weak US economic data suggests that the US central bank (Federal Reserve) will still refrain from raising its key interest rate too soon. Weaker-than-expected US jobs data caused that most Southeast Asian stock markets strengthened today. Moreover, the rupiah also felt the positive impact. According to the Bloomberg Dollar Index, the rupiah had appreciated 0.54 percent to IDR 12,950 per US dollar by 15:17 pm local Jakarta time.

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  • Indonesian Rupiah versus US Dollar; Factors at Play

    In the past couple of days the US dollar regained its bullish momentum, strengthening against most other currencies including the Indonesian rupiah. The greenback had been under pressure after the Federal Reserve signalled - contrary to markets expectation - it would not raise the US interest rate environment too soon as the US economic growth outlook and US inflation were still not at the right level yet. This made emerging market assets more attractive for the short-term. However, this development seems to have been short-lived.

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  • Subsidized Gasoline Price Indonesia May Rise in April on Higher Oil Price

    The Indonesian government may raise the price of subsidized gasoline for April 2015 as the Indonesian Crude Price (ICP) rose through February and March from USD $52 per barrel to USD $57 per barrel based on data from the upstream oil & gas regulator SKK Migas. After the Indonesian government drastically reduced fuel subsidy spending at the start of 2015, subsidized gasoline prices are now set each month, in line with price fluctuations on the world market. For subsidized diesel the government provides a fixed IDR 1,000 per liter.

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  • Indonesian Currency Update: Stronger Rupiah, Weaker US Dollar

    Indonesia’s rupiah exchange rate started the week on a firm tone as the US dollar weakened amid uncertainty over the timing of higher US interest rates. Contrary to initial expectation, the latest Federal Reserve meeting (held on 17-18 March) did not indicate that there will be a quick interest rate hike in the world’s largest economy hence boosting appetite for emerging market assets. In addition, the Indonesian government and central bank (Bank Indonesia) pledged to safeguard rupiah stability.

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  • What Impacted on the Performance of the Indonesian Rupiah this Week?

    Apparently, the Federal Reserve’s message that it would still wait before raising US interest rates only implied a brief weakening of the US dollar against emerging Asian currencies. On Friday (20/03), the Indonesian rupiah depreciated 0.51 percent to IDR 13,124 per US dollar according to the Bloomberg Dollar Index. Current high volatility is also the result of different policies being executed by different central banks. Whereas the US Federal Reserve aims to further tighten monetary policy, central banks in Japan and Europe do the opposite.

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  • Indonesian Rupiah & Stocks Strong after Federal Reserve Meeting

    Indonesian stocks and the rupiah exchange rate strengthened rapidly on Thursday (19/03) after the Federal Reserve refrained from raising its key interest rate at the two-day FOMC meeting that ended on Wednesday (18/03) as US inflation is still tame while US economic growth somewhat moderated. The US central bank signaled that it is not in a hurry to raise interest rates, but, on the other hand, it also dropped the word ‘patient’ from its guidance on interest rates (which have been at historic lows since late 2008).

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  • Downward Spiral Indonesian Rupiah; Falls Beyond 13,200 per USD

    Regarding Indonesia, the spotlight remains sharply focused on the drastically depreciating rupiah exchange rate. As speculation is growing that the US Federal Reserve will soon raise its interest rate regime, emerging market assets (both currencies and stocks) tend to weaken. However, although most Asian emerging currencies are weakening against the US dollar, the rupiah is particularly vulnerable as Indonesia is plagued by a wide current account deficit, which informs investors that the country is relying on foreign capital inflows.

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Latest Columns US Dollar

  • US Dollar to Dictate Asian Currency Moves in 2016

    The financial markets have had an interesting year in 2015, with several significant surprises seen in the major asset classes. On the whole, 2015 could probably be best described as a year of stabilizing with stocks and commodities holding mostly steady throughout the period. This has been largely true in the currency markets, as well. But there are some factors that are likely to influence trends for world currencies in new ways in 2016. Central banks in some regions will likely have significant influence in others, and investors will need to remain aware of the possibilities early in order to position for potential trend chances in critical areas.

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  • Does Bank Indonesia Have Room to Cut its Key Interest Rate?

    As Indonesia's inflation rate has eased to 6.25 percent (y/y) in October 2015 from 6.83 percent (y/y) in the previous month, and given that Indonesian inflation will ease more markedly in the last two months of 2015 as the impact of the subsidized fuel price hike in November 2014 will vanish, the central bank of Indonesia (Bank Indonesia) seems to have more scope to cut its current relatively high benchmark interest rate, hence giving rise to accelerated economic activity.

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  • Indonesian Rupiah Headed for more Declines against US Dollar

    For most of this year, the Indonesian rupiah has met selling pressure against the US Dollar. Year-to-date price activity in the USD/IDR shows a rise from below IDR 12,250 to new highs above IDR 13,330 per US dollar. For Indonesian export companies, this is great news as it means that their products will be cheaper for foreign consumers to buy. For the domestic economy, this creates a different set of implications as it also makes it less likely that foreign investors will be looking to buy into Indonesian assets.

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  • Financial Update Indonesia: Rupiah Falls on Changing Global Expectations

    When we look at the long-term activity in the Indonesian rupiah, we have seen a surprising level of strength when viewing the activity seen in recent months. This has been surprising for a few different reasons, as this is not something that can be said for markets in emerging Asia as a whole. This essentially suggests that economic activity in the region has been somewhat disjointed and that trends visible in one country cannot necessarily be expected in another. But when we look at chart activity in the rupiah itself, we can see that the broader trends have started to change over the last two months.

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  • How Will US Dollar Trends Impact the Indonesian Rupiah?

    Over the last year, the Indonesian rupiah has been rising when compared to a wide variety of world currencies. Some of the more pronounced strength has been seen against the US dollar, which has been travelling in the opposite direction for most of the same period. To many investors that are focused on the currency markets, it might appear as though these two currencies are largely unrelated. But when we look at the trends that have been developing over the last year, it quickly becomes clear that this is just not the case.

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  • Update Indonesia Rupiah: Strengthening against the USD over the Past Month

    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.

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  • Indonesian Rupiah Update: Could US Policy Weigh on Rupiah?

    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.

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  • Pressures on Indonesia’s Rupiah to Continue in the First Half of 2015

    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.

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  • Interest Rate Environment: Why Bank Indonesia Left it Unchanged?

    Indonesia’s central bank (Bank Indonesia) decided to hold the country’s key interest rate (BI rate) at 7.50 percent, the deposit facility rate at 5.50 percent, and the lending facility rate at 8.00 percent at the Board of Governor’s Meeting conducted on Tuesday 17 March 2015. Bank Indonesia said that its decision is in line with its ongoing efforts to push inflation back to the target range of 4±1 percent for both 2015 and 2016, and to guide the country’s current account deficit towards a healthier level at 2.5-3 percent of GDP in the medium term.

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  • Analysis Performance of the Indonesian Rupiah Exchange Rate

    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.

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