The central bank of Indonesia (Bank Indonesia) announced that the nation's foreign exchange reserves climbed to USD $116.4 billion at the end of December 2016, up from USD $111.5 billion one month earlier. Growth was attributed to foreign exchange receipts, primarily stemming from the issuance of government global bonds debt securities, the withdrawal of government foreign loans, tax revenues and oil & gas export proceeds, that all surpassed the use of foreign exchange for government external debt repayments and Bank Indonesia's maturing foreign exchange bills.

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The central bank of Indonesia (Bank Indonesia) expects inflation to reach the range of 0.50-0.60 percent month-on-month (m/m) in December 2016 as Christmas and New Year celebrations, traditionally, give rise to higher consumer spending. The projection would also imply that full-year inflation will fall well within Bank Indonesia's target range of 3.0 - 5.0 percent (y/y) in 2016 (year-to-date, Indonesian inflation has accumulated to 2.59 percent), the second straight year of mild inflation (for Indonesian standards).

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The central bank of Indonesia (Bank Indonesia) announced that the country's foreign exchange reserves fell to USD $111.5 billion at the end of November 2016, from USD $115.0 billion in the preceding month. The USD $3.5 billion decline was caused by Bank Indonesia's efforts to stabilize the rupiah exchange rate as well as the government's external debt repayments. Despite the decline, Bank Indonesia regards the current level of forex reserves as healthy.

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The central bank of Indonesia (Bank Indonesia) informed that around IDR 30 trillion (approx. USD $2.26 billion) of capital outflows from Indonesia occurred after Donald Trump was chosen as 45th US president in November. His victory caused a high degree of uncertainty about future US political and economic policies, while markets also expect to see a stronger US economy as Trump is expected to focus on the interests of the USA, and not so much on its impact on the international community.

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The central bank of Indonesia (Bank Indonesia) announced that the nation's current account deficit (CAD) eased to 1.83 percent of gross domestic product (GDP) in the third quarter of 2016, improving from a revised 2.2 percent of GDP deficit in the preceding quarter. Bank Indonesia further informed that the CAD will most likely remain in the range of 2.0 - 2.5 percent of GDP in full-year 2016. In 2015 Indonesia's CAD eased to 2.1 percent of GDP. Since late-2011 Southeast Asia's largest economy has had to cope with a wide current account deficit.

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The Financial System Stability Committee (in Indonesian: Komite Stabilitas Keuangan, or KSSK) stated that Indonesia's economy is stable. The KSSK further informed that it will raise efforts to enhance market confidence in Indonesia's financial sector. The KSSK, an Indonesian institution that is responsible for preventing financial crises, consists of a selection of key policymakers from the Finance Ministry, Bank Indonesia, Financial Services Authority (OJK) and Deposit Insurance Corporation (LPS).

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The central bank of Indonesia (Bank Indonesia) expects Indonesia's current account deficit to have improved to below 2 percent of the country's gross domestic product (GDP) in the third quarter of 2016. This is good news as a wide (and structural) current account deficit is considered a financial weakness because it means the country is building up liabilities to the rest of the world. Ever since late-2011 Indonesia has been suffering a wide current account deficit. This is particularly attributed to the globe's low commodity prices after 2011.

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According to the latest survey of Indonesia's central bank (Bank Indonesia), consumer confidence in Southeast Asia's largest economy fell 3.3 points to 110 in September 2016 (a reading above 100.0 indicates optimism). Consumer confidence somewhat weakened as the Indonesian people expect upward price pressures at the year-end, specifically rising prices of processed food, beverages, cigarettes, tobacco and groceries. Meanwhile, respondents also expect to put less money in savings in the next six months.

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Agus Martowardojo, Governor of Indonesia's central bank (Bank Indonesia), says there remains room for monetary easing in Southeast Asia's largest economy in the last few months of 2016, provided that both the domestic and global context remain conducive. However, Martowardojo did not specify what this monetary easing exactly entails: a lower key interest rate, cutting the primary minimum statutory reserves (in Indonesian: giro wajib minimum primer), or macro-prudential policy easing? Whatever the move may be, it will for sure be data-dependent, Martowardojo emphasized.

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The central bank of Indonesia (Bank Indonesia) reported that the country's foreign exchange reserves rose by USD $2.1 billion to USD $113.5 billion in August 2016 on the back of tax revenues, oil and gas export earnings, the withdrawal of public foreign debt, and the selling of foreign currency-denominated Bank Indonesia Securities (SBBIs). Inflows of foreign currency exceeded the amount that Indonesian authorities had to pay for foreign debt settlements and maturing SBBIs.

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The central bank of Indonesia (Bank Indonesia) expects to see deflation at 0.15 percent month-to-month (m/m) in February 2016. Bank Indonesia Governor Agus Martowardojo said lower (government) administered prices in combination with low core inflation will be the recipe for deflation in the second month of the year. The lower administered prices that are primarily the cause of deflation consist of fuel prices, air fares and 12-kilogram liquefied petroleum gas (LPG) canisters. In the first month of the year Indonesian inflation accelerated to 4.14 percent (y/y).

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The central bank of Indonesia (Bank Indonesia) is expected to keep its benchmark interest rate (BI rate) relatively high in order to safeguard Indonesia's financial stability in 2016 (instead of seeking accelerated economic growth through a rate cut). Despite easing pressures on inflation and the country's current account balance, Bank Indonesia Governor Agus Martowardojo said that persistent global uncertainty (referring to the looming US Fed Fund Rate hike and China's slowdown) justifies the tight monetary stance.

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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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The central bank of Indonesia announced on Thursday (17/09) that it the country’s key interest rate (BI rate) at 7.50 percent, while maintaining the deposit facility rate at 5.50 percent and the lending facility rate at 8.00 percent. According to Bank Indonesia (BI) this decision is consistent with its efforts to push inflation towards the target corridor of 4±1 percent in both 2015 and 2016. In addition, the decision is also part of Bank Indonesia’s measures to anticipate possibilities of a Fed Fund Rate (FFR) hike.

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Although Indonesian stocks managed to rebound, the rupiah continued to depreciate against the US dollar today (25/08). However, rupiah weakening was limited as Bank Indonesia was closely monitoring and intervening in markets to support the rupiah. Based on the Bloomberg Dollar Index, the Indonesian rupiah depreciated 0.03 percent to IDR 14,054 per US dollar. As significant further rupiah weakening is assumed to seriously undermine confidence in the rupiah, the central bank’s intervention efforts are well received by investors.

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During Bank Indonesia’s Board of Governors it was decided on 18th August 2015 to hold the BI Rate at 7.50 percent, while maintaining the Deposit Facility rate at 5.50 percent and the Lending Facility rate at 8.00 percent. The decision is consonant with efforts to control inflation within the target corridor of 4±1 percent in 2015 and 2016. In the short term, Bank Indonesia (BI) is focused on efforts to stabilize the rupiah amid uncertainty in the global economy, by optimizing monetary operations in the rupiah and the foreign exchange market.

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In a bid to boost economic activity in Indonesia, the central bank (Bank Indonesia) revised several regulations involving down payments for the purchase of cars and motorcycles as well as the maximum loan-to-value (LTV) ratios for first or more home purchases by Indonesian citizens. Yati Kurniati, Director of Bank Indonesia’s Macroprudential Department, said that the central bank implemented the looser monetary policy in the property and automotive sectors in an effort to boost credit growth, hence boosting the whole economy.

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Soon it will be made easier to buy property in Indonesia as the country’s central bank (Bank Indonesia) plans to ease down payment (DP) requirements for mortgages. Today (22/05), Bank Indonesia Governor Agus Martowardojo told reporters that the DP obligation for first-home buyers will be lowered from 30 percent to 20 percent of the property’s value. This relaxation should have a positive effect on the performance of Indonesia’s financial institutions and property developers as demand for loans and property is assumed to grow.

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Investors are clearly waiting for results of Bank Indonesia’s Board of Governor’s Meeting, conducted today (19/05). In this monthly policy meeting, Indonesia’s central bank will decide on its monetary approach. For most market participants it is of crucial importance to learn whether Bank Indonesia will adjust its interest rate policy in order to support the country’s economic growth (which slowed to a five-year low in the first quarter of 2015). Ahead of results, scheduled to be released this afternoon, Indonesian stocks and the rupiah weaken.

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Bank Indonesia announced today that the country’s total foreign debt rose 7.6 percent (y/y) to USD $298.1 billion in the first quarter of 2015. This figure means that the pace of the country’s foreign debt growth has slowed from the 10.2 percentage point growth (y/y) that was recorded in the preceding quarter. Both public and private sector foreign debt growth slowed as both sectors are more careful to take up loans amid a weakening rupiah while export revenues decline amid sluggish global (and domestic) economic growth.

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