Indonesia's central bank (Bank Indonesia) said that it expects the Indonesian rupiah exchange rate to trade between IDR 11,600 and IDR 11,800 per US dollar throughout the fiscal year of 2014. Governor of Bank Indonesia Agus Martowardojo said that this assumption is based on pressures that originate from Indonesia's current account deficit. In 2013, the current account deficit hit USD $29.09 billion, or 3.33 percent of the country's gross domestic product (GDP). The current account balance has a major influence on the performance of a currency.

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The central bank of Indonesia (Bank Indonesia) expects to see a trade deficit in the month of April 2014 due to a significant increase of imports (around 11 percent month-to-month), while prices of a number of important export commodities have been under pressure (including coal and crude palm oil). Governor of Bank Indonesia Agus Martowardojo said that weak demand from China impacts negatively on the trade balance. Bank Indonesia's statement contradicts the institution's earlier statement which hinted at a surplus of USD $600 million in April.

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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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The Governor of Indonesia’s central bank (Bank Indonesia), Agus Martowardojo, expects that the country’s trade balance will post a surplus of around USD $600 million in April 2014, roughly similar to the surplus that was recorded one month earlier (USD $673 million). The April 2014 surplus would be supported by an improvement in non-oil & gas exports, stable commodity prices (particularly coal and crude palm oil/CPO), as well as the waning influence of the Minerba Act.

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The Residential Property Price Survey still indicates slowing growth of Indonesian residential property prices (in the primary market) in the first quarter of 2014. The Residential Property Price Index grew 1.45 percent (quarter to quarter) in the first quarter of 2014 or 7.92 percent year-on-year, lower than the growth that was recorded in the previous quarter of 1.77 percent (qtq) or 11.51 percent (yoy). The slowdown occurred in all types of homes, but in particular the medium and large homes segment.

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The central bank of Indonesia (Bank Indonesia) announced that the improving trend of the current account deficit continued in the first quarter (January-March) of 2014. The current account deficit fell from USD $4.3 billion, equivalent to 2.12 percent of the country's gross domestic product (GDP) in the fourth quarter of 2013 to USD $4.2 billion (2.06 percent of GDP) in Q1-2014. This improvement was brought about due to a decrease in imports of goods and the narrowing deficits in the services and income accounts.

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At the Board of Governors Meeting (08/05), Bank Indonesia decided to keep its benchmark interest rate (BI Rate) at 7.50 percent, the Lending Facility at 7.50 percent and the Deposit Facility at 5.75 percent. Bank Indonesia considers this monetary policy consistent with efforts to direct inflation back to its target level of 4.5 ± 1 percent in 2014 and 4.0 ± 1 percent in 2015, as well as to further ease the country's current account deficit to a more sustainable level. On Friday, Bank Indonesia is expected to release current account data covering Q1-2014.

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The Indonesian rupiah exchange rate continued its recent depreciating trend on Thursday (08/05). According to the Bloomberg Dollar Index, the currency had depreciated 0.36 percent to IDR 11,619 per US dollar at 13:30 local Jakarta time. Apart from market participants' wait and see attitude ahead of results of Bank Indonesia's Board of Governors Meeting, which is held today and will inform whether the current benchmark interest rate of 7.50 percent will be maintained, increased concerns about exports to China also put pressure on the rupiah.

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The foreign exchange reserves at the central bank of Indonesia (Bank Indonesia) increased about USD $3 billion to USD $105.6 billion at the end of April 2014, the highest level in 15 months, particularly due to export earnings of government-owned oil and gas exporters. Bank Indonesia said that the current position of forex reserves is equivalent to 6.1 months of imports or 5.9 months of imports and servicing external debt (well above the international standard of three months of imports). Today, the central bank's Board of Governors Meeting is held.

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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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The central bank of Indonesia (Bank Indonesia) maintained its benchmark interest rate - the 7-day reverse repurchase rate - at 4.75 percent at the policy meeting on 17-18 May 2017, a decision that is in line with analysts' forecasts. Bank Indonesia said the decision is consistent with its efforts to maintain macroeconomic and financial system stability "by driving the domestic economic recovery process", while continue to monitor external threats stemming from US policy directions and geopolitical conditions, specifically in the Korea Peninsula, as well as domestic threats stemming from inflationary pressures and ongoing consolidation in the banking and corporate sectors.

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Data from the central bank of Indonesia (Bank Indonesia) show Indonesia's current account deficit widened modestly to USD $2.4 billion (or 1.0 percent of Indonesia's gross domestic product, GDP) in the first quarter of 2017. This increase was driven by rising deficits in the oil & gas trade balance and primary income. In the last quarter of 2016 the current account deficit was at (an upward revised) 0.9 percent of GDP. Despite slight widening, Indonesia's current account balance is regarded as being in a healthy state, especially considering the major improvement compared to Q1-2016.

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The central bank of Indonesia (Bank Indonesia) kept its benchmark interest rate (seven-day reverse repo rate) at 4.75 percent at the April policy meeting (19-20 April 2017), while its deposit facility rate and lending facility rate stayed at 4.00 percent and 5.50 percent, respectively. Bank Indonesia considers the current interest rate environment appropriate to face global uncertainties as well as rising inflationary pressures at home.

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The central bank of Indonesia (Bank Indonesia) left its interest rate policy unchanged at the March 2017 policy meeting. This decision was in line with expectations especially after Bank Indonesia officials had stated that they see few room for monetary easing in the foreseeable future considering the US Federal Reserve is likely to raise its key rate several times this year (which could encourage capital outflows from Indonesia), while inflationary pressures in Indonesia are rising.

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Bank Indonesia, the central bank of Indonesia, decided to maintain its benchmark interest rate, the BI 7-day (Reverse) Repo Rate (BI-7 day RR Rate), at 4.75 percent at the February 2017 policy meeting as Indonesia's inflation rate is expected to rise amid growing domestic demand and administered price adjustments, while the central bank also tries to mitigate the impact of looming normalization of US interest rates (expected later this year). Meanwhile, Bank Indonesia kept its deposit facility and lending facility rates at 4.00 percent and 5.50 percent, respectively.

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Bank Indonesia, the central bank of Indonesia, announced on Friday (10/02) that Indonesia's balance of payments surplus reached USD $4.5 billion in the fourth quarter of 2016 as the capital and financial accounts' surplus managed to (more than) compensate for the USD $1.8 billion current account deficit (or 0.8 percent of the country's gross domestic product/GDP) in the same quarter. Regarding full-year 2016, Indonesia posted a USD $12.1 billion surplus in its balance of payments, while its current account deficit was equivalent to 1.8 percent of GDP.

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The central bank of Indonesia (Bank Indonesia) decided to leave its interest rate environment unchanged at the January 2017 policy meeting on Thursday (19/01). The benchmark seven-day reverse repurchase rate (BI 7-day RR Rate) was kept at 4.75 percent, while the Deposit Facility and Lending Facility rates were maintained at 4.00 percent and 5.50 percent, respectively. The decisions of Bank Indonesia are in line with analysts' forecasts. Due to risks of capital outflows Indonesia's central bank had few room to ease monetary policy.

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Stock markets in Asia are mixed, yet tepid on Friday (16/12) after the US Federal Reserve raised its interest rate regime for the second time in a decade on Wednesday (14/12). Although the Fed's move was widely anticipated (and therefore already "priced in" to a high degree) it still resulted in some capital outflows from Asia's stock markets on Thursday (13/12). Japan, as usual, is the notable exception as US dollar strength (or yen weakness) makes Japan's export-oriented stocks more attractive.

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Bank Indonesia, the central bank of Indonesia, kept its benchmark interest rate unchanged at the December 2016 policy meeting, nearly a day after the US Federal Reserve decided to raise its key Fed Funds Rate by 25 basis points to the range 0.50 - 0.75 percent. Moves of both central banks were expected. Monetary tightening in the USA triggers capital outflows from emerging markets (the Indonesian rupiah depreciated around 0.70 percent against the US dollar on Thursday). Therefore, Bank Indonesia had little room to seek monetary easing.

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The Bank of Indonesia recently resorted to a sudden cut in interest rate (by 25 bps to 4.75 percent) at its 20th October 2016 meeting. This followed a 25 bps reduction in September and thus this is the sixth time this year that the Indonesian central bank has elected to loosen monetary policy.

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