Most stock indices in Asia fell on Tuesday's trading day (10/11) on concern that China's stalling economy negatively impacts on the pace of global economic growth, while markets are also bracing for a looming US interest rate hike before the year-end. Moreover, sentiments in Southeast Asia are not positive as the majority of Q3-2015 earnings reports have been unfavorable. Combined, it triggers a flight to safer haven assets. Indonesia's benchmark Jakarta Composite Index fell 1.08 percent to 4,451.05 points.

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Shares in the Asia-Pacific were mixed after opening on Monday (09/11). While, Japanese shares touched a fresh 2.5 month high on a weaker yen and Chinese shares went up (despite disappointing trade data), shares in Indonesia, South Korea and Australia were down. Indonesia's benchmark Jakarta Composite Index fell approximately 0.50 percent after opening on Monday, while the Indonesian rupiah had depreciated 0.83 percent to IDR 13,676 per US dollar by 09:16 am local Jakarta time.

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On 8 November 2015, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic subjects such as an analysis of Indonesia's Q3-2015 GDP growth, an inflation update, overviews of Islamic banking and the taxi services industry, a rupiah & stock market update, and more.

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A Finance Ministry official said Indonesia's state budget deficit is likely to exceed the projected IDR 300 trillion (approx. USD $22 billion) in 2015, pushing the deficit to 2.7 percent of Indonesia's gross domestic product (GDP), dangerously close to the maximum 3 percent of GDP cap that is set by a 2003 law. In the original 2015 State Budget the government targeted a budget deficit of 1.9 percent of GDP. This target was then revised to 2.2 percent in September. However, another revision is needed due to poor tax revenue collection.

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Indonesian stocks and the rupiah are feeling the negative impact of news from the USA. Both Federal Reserve Chairwoman Janet Yellen and New York Federal Reserve President William Dudley said a Fed Fund Rate hike in December is a "live possibility" amid low US employment, continued GDP growth and confidence that inflation will rise to the US central bank's target range. As a result of these remarks gold dropped to a one-month low, stocks declined, while bond yields and the US dollar were pushed higher.

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Asian stocks continue to rise on positive market sentiments on Wednesday (04/11). Supported by gains on Wall Street overnight and higher crude oil prices (pushing energy stocks higher), most Asian indices surged. Investors seem to have more confidence in the world economy. Earlier this week data signal that manufacturing activity continues to expand in the US and Europe, while in China it is stabilizing. Indonesia's benchmark Jakarta Composite Index was up 1.43 percent to 4,597.69 points by 10:50 am local Jakarta time.

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Indonesian stocks and the rupiah outperformed their regional peers on Tuesday (03/11) after US stocks posted strong gains overnight on the back of a spate of acquisition deals and positive US manufacturing activity and construction spending data. Most Asian stock indices rose on these improved global market sentiments. Indonesia's benchmark Jakarta Composite Index climbed 1.53 percent to 4,533.09 points.

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Indonesia's benchmark stock index (Jakarta Composite Index) was one of the few Asian indices that bucked the trend on today's trading day (02/11). Whereas most Asian indices, led by Japanese shares, fell on concern about persistent manufacturing contraction in China, the Jakarta Composite Index managed to rise 0.22 percent to 4,464.96 points. Meanwhile, oil prices dropped and the US dollar extended losses against most emerging market currencies.

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On 1 November 2015, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic subjects such as approval of the 2016 State Budget, an update on stocks & the rupiah, the Trans-Pacific Partnership deal, Trikomsel Oke's default, the World Bank's doing business index, and more.

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Indonesian assets are leading declines in Asia's equity and currency markets on today's trading day after a 'hawkish' statement released by the Federal Reserve indicated that the US will not raise its Fed Fund Rate yet, but does seem to open a door to a December interest rate hike. Despite the good performance of US stocks on Wednesday (28/10), most Asian markets were down today. Moreover, solid factory output in Japan reduced chances of further stimulus measures in Japan (Japan's central bank is to meet this Friday).

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The central bank of Indonesia (Bank Indonesia) said the country's current account deficit remained under control, albeit widening in the last quarter of 2017. Indonesia's current account deficit reached USD $5.8 billion or 2.2 percent of gross domestic product (GDP) in Q4-2017 (up from a deficit of USD $4.6 billion or 1.7 percent of GDP in the preceding quarter).

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Although the Indonesian rupiah has been strengthening against the US dollar since mid-December 2017, the rupiah may encounter serious pressures in the year 2018 amid US tax reforms, the US Federal Reserve's further monetary tightening, and unstable geopolitics. Meanwhile, Indonesian exports are expected to grow, but only in the range of 5-6 percent year-on-year (unlike 2017 when the nation's exports rebounded 17 percent).

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Earlier this week, the central banks of Indonesia (Bank Indonesia), Malaysia (Bank Negara Malaysia), Thailand (Bank of Thailand) jointly announced the launch of the local currency settlement framework. This framework aims at boosting the use of local currencies in transactions (specifically related to trade and investment) conducted between Indonesia, Malaysia and Thailand in an effort to reduce these countries' dependence on the US dollar.

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The Bank Indonesia (BI) Board of Governors agreed to hold the BI 7-day Reverse Repo Rate at 4.25 percent, while maintaining the deposit facility and lending facility rates at 3.50 percent and 5.00 percent, respectively, effective per 20 October 2017. The decision was in line with efforts to maintain macroeconomic and financial system stability, while stimulating the domestic economic recovery.

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After concluding its monthly two-day policy meeting on Thursday (20/07) the central bank of Indonesia (Bank Indonesia) decided to leave its interest rate environment unchanged. The BI 7-day (Reverse) Repo Rate (BI-7 day RR Rate) was kept at 4.75 percent, while the deposit facility and lending facility rates were kept at 4.00 percent and 5.50 percent, respectively.

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Despite the suicide bombs attack in Jakarta on Wednesday evening (24/05) that killed 3 police officers (and the two militants) at a Jakarta bus station, the Jakarta Composite Index rose after opening on Friday (26/05), while the rupiah only weakened slightly against the US dollar (Thursday was a public holiday). It is yet another example of the fact that markets around the globe have become used to the existence of militant attacks. Particularly a relatively small attack will not lead to any negative sentiments.

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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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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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Bank Indonesia, the central bank of Indonesia, is expected to maintain its benchmark interest rate (the seven-day reverse repurchase rate, or reverse repo) at 4.75 percent in the remainder of 2017. Priasto Aji, economist at the Asian Development Bank (ADB), says Bank Indonesia may not need to adjust its key interest rate at all this year even though there is looming further monetary tightening in the USA.

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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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