Robust rupiah appreciation in the month of November 2018 has taken many people – such as policymakers, businessmen, and analysts, including us – by surprise.

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Fintech (short for financial technology) is a relatively new global industry that uses technology to improve various activities in the finance sector. For example, smartphones allow for easy mobile banking, while investing services or cryptocurrency are examples of technologies that aim at making financial services more accessible to the general public. Fintech startups have actually been booming rapidly in recent years, making traditional players (most notably: banks) somewhat nervous (and forcing these traditional players to apply new technology into their own business models).

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After the devastating 6.9 and 7.4-magnitude earthquakes in Lombok and Central Sulawesi in August and September, local people and businessmen have again been made aware of the risks involved when living, working and investing in Indonesia, a country that is located on the notorious Ring of Fire. This Ring of Fire is a major area in the basin of the Pacific Ocean, a center of seismic activity - triggered by tectonic movements - and thus prone to frequent earthquakes, tsunamis, and volcanic eruptions.

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Indonesia’s current account balance – which measures the flow of goods, services and investment - remains a source of concern. In the second quarter of 2018 Indonesia’s current account deficit widened to USD $8.02 billion or 3.0 percent of gross domestic product (GDP). It is the biggest quarterly deficit since Q2-2014 and implies that Indonesia is dependent on foreign capital to fund its deficits. This makes investors nervous and therefore foreign funds rapidly exit Indonesia in times of global turmoil.

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