Below is a list with tagged columns and company profiles.

Latest Reports Rupiah

  • Indonesian Stocks & Rupiah Under Pressure as Collapse Lira Persists

    Indonesian assets are under pressure on Monday (13/08). By 16:00 pm local Jakarta time, the Indonesian rupiah had depreciated 0.90 percent to IDR 14,608 per US dollar, while the benchmark Jakarta Composite Index had plunged 3.55 percent. Although all emerging markets in Asia are under pressure on Monday, Indonesia is seemingly the most fragile one.

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  • Renewed Pressures Push Indonesia's Rupiah to IDR 14,550 per US Dollar

    The Indonesian rupiah had been fairly stable against the US dollar since Bank Indonesia's aggressive 0.50 percent rate hike in late-June (a move that caught many by surprise). However, after the central bank of Indonesia decided to leave its benchmark interest rate unchanged at the July policy meeting (which was concluded on Thursday, 19/07), the rupiah has become under heavy pressure again.

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  • Current Account Deficit Indonesia Expected to Widen to 2.5% of GDP

    The current account deficit of Indonesia could widen to 2.5 percent - or more - of the nation's gross domestic product (GDP) in the second quarter of 2018 according to Bank Indonesia's Senior Deputy Governor Mirza Adityaswara. He added that a current account deficit below 3 percent of GDP is still in the safe zone. Dividend payouts are expected to put additional pressure on the Q2-2018 current account deficit of Indonesia.

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  • Impact of the Weak Rupiah on Indonesia's Food & Drink Industry

    In theory the weak rupiah makes Indonesian export products more competitive on the global market. However, when the content of those export products contain a high degree of imported raw materials, then the positive effect of a weak rupiah is disabled. And the situation is similarly complicated for those companies that import a high degree of raw materials to make products that are sold on the domestic market. They could of course simply raise retail prices. However, the consequence is that demand for the products could drop.

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  • Indonesia's Foreign Exchange Reserves Tumble for 5th Straight Month

    The central bank of Indonesia (Bank Indonesia) announced that the nation's foreign exchange reserves had fallen to USD $119.8 billion (per end June 2018), thus declining USD $3.1 billion compared to the position in the preceding month. As such, the recent trend continued: Indonesia's foreign exchange assets have now fallen for five straight months after touching a record high of nearly USD $132.0 billion in January 2018 (see table below).

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  • Gauge of Market Fear: Indonesia's Credit Default Swap Rising

    Risk perceptions on Indonesian debt have risen amid concerns over the fragile rupiah. So far in 2018 the Indonesian rupiah has depreciated around 6 percent against the US dollar due to US monetary tightening and simmering concerns over the outbreak of a global trade war. Waning risk perception is reflected by the rising credit default swap (CDS) of the five-year Indonesian bond.

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  • Currency of Indonesia: Rupiah Finding a New Equilibrium Rate?

    The central bank of Indonesia (Bank Indonesia) hiked its benchmark interest rate three times over the past six weeks - by a total of 1.00 percent to take the benchmark to the level of 5.25 percent - in order to defend the rupiah. Last Friday (27/06) Bank Indonesia surprised part of the market by implementing a 0.50 percent rate hike. As a result, the rupiah strengthened markedly. However, its impact on the rupiah performance seems very temporary. This week the rupiah is again depreciating, hovering around the IDR 14,400 per US dollar level.

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  • Bank Indonesia Raises Key Interest Rate by 50 bps to 5.25%

    As we had predicted this morning, Bank Indonesia decided to raise its benchmark interest rate by 50 basis points (bps) to 5.25 percent at the two-day June policy meeting that was concluded earlier today. Presumably markets had been expecting a 25 bps rate hike (therefore being priced in already) and therefore the central bank of Indonesia possibly felt it had to take a more aggressive approach to defend the Indonesian rupiah that had weakened beyond the IDR 14,400 per US dollar level.

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  • Market Participants Await Bank Indonesia's Policy Decision

    The Indonesian rupiah continues to slide on Friday (29/06) and is now hovering around the IDR 14,400 per US dollar level. The weak rupiah reaffirms analysts' expectations of seeing another interest rate hike. Today, the central bank of Indonesia (Bank Indonesia) will conclude its June policy meeting. But perhaps the crucial question is not "will Bank Indonesia raise its benchmark rate?" Possibly the more crucial questions are "by how much will it raise its rate?" and "what other policies will it implement to strengthen rupiah stability as well as financial stability?"

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Latest Columns Rupiah

  • Analysis Indonesia Stock Market & Rupiah: Post-Brexit Recovery

    As expected, Indonesia's benchmark Jakarta Composite Index fell on Friday (01/07) due to profit-taking after an impressive recent (relief) rally that brought the index into bull market territory earlier this week. Meanwhile, the Indonesian rupiah maintained its momentum, appreciating 0.72 percent to IDR 13,115 per US dollar on the first day of the new month, the currency's strongest level in three and a half months. Most Asian emerging markets have now repaired their earlier Brexit-induced losses.

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  • Failure to Attract Ratings Upgrade Could Inhibit Rupiah

    Over the last few months, we have seen a good deal of stability in the financial markets. This has been the experience in most asset classes, and the global value of the Indonesian rupiah is giving investors an idea of how the IDR is likely to continue to perform as an emerging market asset.

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  • Economic Update Indonesia May 2016: Inflation & Manufacturing PMI

    The first day of the month - in case of a working day - implies that investors can count on the release of several macroeconomic data from Indonesia, specifically inflation and manufacturing activity. Statistics Indonesia (BPS) announced this morning (01/06) that Indonesia's consumer inflation reached 0.24 percent (m/m), or 3.33 percent (y/y), in May 2016. Meanwhile, the Nikkei Indonesia Manufacturing Purchasing Managers' Index (PMI) eased to a reading of 50.6 in May from 50.9 one month earlier. Lets take a closer look at these data.

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  • Can the Indonesian Rupiah Continue to Rally?

    Over the last few months, we have seen some impressive gains in the Indonesian rupiah (IDR) relative to the US dollar (USD). When we compare the performance of the IDR against the rest of the emerging market space, we can see that its gains are behind only the Brazilian real (BRL) and the Malaysian ringgit (MYR) for the period. This has prompted a wave of foreign export purchases as Indonesian consumers look to take advantage of the stronger currency.

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  • A Quick Look at Indonesia's Largest Listed Retail Businesses

    Indonesian retail businesses are optimistic that their performance will improve in 2016 on the back of rising purchasing power amid the government's decision to cut energy tariffs (fuel and electricity) and its plan to raise non-taxable income by 50 percent. These moves mean that Indonesian consumers (particularly in the lower middle class segment) should have more money to spend. Tutum Rahanta, Deputy Chairman of the Indonesian Retailers Association (Aprindo), says retail business can grow by 12 - 15 percent (y/y) in 2016, considerably higher than the 7 - 8 percent (y/y) growth pace realized last year.

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  • Unilever Indonesia to Rebound along with the Overall Economy?

    In 2015 Unilever Indonesia's net profit declined 1.2 percent (y/y) to IDR 5.85 trillion (approx. USD $443 million) due to weakened purchasing power of Indonesian consumers amid the economic slowdown. Last year Indonesia's GDP growth touched the six-year low of 4.79 percent (y/y). This year, however, economic growth is estimated to accelerate beyond the 5.0 percent (y/y) mark. Unilever Indonesia is a leading consumer goods producer in Indonesia that is mainly focused on home & personal care products as well as foods & refreshment products. How about its performance in 2016?

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  • Car, Motorcycle & Cement Sales: Assessing Indonesia's Purchasing Power

    To assess Indonesia's purchasing power and consumer confidence it is always useful to take a look at car and motorcycle sales because when people are confident about their financial situation and have enough money to spend then they tend to buy cars and motorcycles (motorcycles are particularly popular among Indonesia's huge middle to lower-middle class segment). Meanwhile, cement sales inform about property and infrastructure development. Property development is also closely related to purchasing power and consumer confidence because property development grows when people's demand for property rises.

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  • Hot Money Flowing into Indonesia's Bond & Stock Market. A Concern?

    Some concern has been raised about the inflow of foreign 'hot money' into Indonesia amid accomodative monetary policies conducted by central banks of the Eurozone and Japan (the latter implemented negative interest rates in late-January). The world's carry traders are now seeking cheap funds in advanced economies and invest these funds in assets that have attractive returns such as Indonesian bonds and stocks. Indonesia's benchmark interest rate (BI rate) is still relatively high at 7.0 percent after a 25 basis points cut at Bank Indonesia's February 2016 policy meeting.

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  • Snapshot of the Indonesian Economy: Risks, Challenges & Development

    Tomorrow (05/02), Statistics Indonesia is scheduled to release Indonesia's official full-year 2015 economic growth figure. Nearly all analysts expect to see a figure that reflects the continuation of slowing economic growth. Southeast Asia's largest economy expanded 5.0 percent in 2014 and this is expected to have eased further to 4.7 percent or 4.8 percent in 2015 on the back of (interrelated) sluggish global growth, low commodity prices, and weak export performance. Domestically, Indonesia has or had to cope with high interest rates and inflation (hence curtailing people's purchasing power and consumption as well as business expansion).

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  • Outlook Indonesia's Car Sales in 2016: Optimistic or Pessimistic?

    Whereas the Indonesian Automotive Industry Association (Gaikindo), expects Indonesia's car sales to rise five percent (y/y) in 2016 on the back of improving economic conditions, US-based consulting firm Frost & Sullivan expects to see a 4.3 percent decline in the country's car sales this year as continued rupiah depreciation and persistently low commodity prices undermine Indonesians' purchasing power.

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