According to Statistics Indonesia, Indonesia posted a higher-than-expected USD $426 million trade deficit in November, implying that the current account deficit will not improve markedly from the 3.3 percent of GDP in 2013. Inflation also accelerated more than expected due to higher subsidized fuel prices (introduced in November) and the impact of Christmas and New Year. Inflation reached 8.36 percent year-on-year in December 2014. Meanwhile, manufacturing activity in Indonesia hit a record low at 47.6 (HSBC manufacturing purchasing managers’ index) in December. Indonesia’s manufacturing activity has now declined for three consecutive months.

Concern about a Greek exit from the euro pushed the euro to a nine-year low. Meanwhile, the European Central Bank is debating whether to commence purchasing government bonds in a move to boost consumer prices in the Eurozone and stimulate the economy.

Lastly, further falling global oil prices made investors turn to safe havens such as the US dollar and Japanese yen.

Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.92 percent to IDR 12,589 per US dollar on Monday (05/01).

| Source: Bank Indonesia