Today, Bank Indonesia will start its February two-day policy meeting. Markets are eagerly awaiting whether the central bank of Indonesia will indeed cut its key interest rate (BI rate) again. Last month, it had cut the BI rate by 0.25 percent to 7.25 percent as inflation, the current account deficit and the rupiah rate were all under control. Although the rate cut was welcomed by the business community it was considered not enough to push borrowing costs lower in Southeast Asia's largest economy hence unable to boost economic activity significantly.

Lanjut baca ›

On 14 February 2016, 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 over the last seven days. Most of the topics involve economic matters such as an update on Indonesia's current account deficit, free trade agreements, foreign direct investment, cement sales, the Bontang oil refinery project, and more.

Lanjut baca ›

The central bank of Indonesia (Bank Indonesia) announced on Friday (12/02) that Indonesia's current account deficit widened to 2.39 percent of the country's gross domestic product (GDP), or USD $5.1 billion, in the fourth quarter of 2015 from a deficit of 1.94 percent of GDP (USD $4.2 billion) in the preceding quarter. This increase was due to a decline in the non-oil & gas trade balance surplus as non-oil & gas imports grew 7.5 percent (q/q) amid higher domestic demand amid accelerating economic growth in the last quarter of 2015.

Lanjut baca ›

The Indonesia Deposit Insurance Corporation (in Indonesian: Lembaga Penjamin Simpanan, or LPS) expects to see Indonesia's current account deficit growing to USD $20.8 billion, equivalent to 2.3 percent of the country's gross domestic product (GDP), in 2016. In the following year, the institution estimates that the current account deficit will continue to widen toward USD $25.1 billion (2.5 percent of GDP) due to an expected decline in Indonesia's trade surplus.

Lanjut baca ›

On Wednesday (13/01) Indonesia's central bank is set to start its monthly policy meeting. A novelty this year is that the monthly policy meetings of Bank Indonesia will take two days instead of one. Another interesting novelty is that Bank Indonesia invited Indonesia's Chief Economics Minister Darmin Nasution to attend the central bank's first policy meeting of 2016. Analyst opinions about whether Bank Indonesia has room to cut its relatively tight monetary policy are mixed.

Lanjut baca ›

China's yuan (also known as renminbi) was included in the International Monetary Fund's Special Drawing Rights (SDR) - with a weightage average of 10.91 percent - on Tuesday (01/12), a decision that will take effect on 1 October 2016. Other currencies in the SDR are the US dollar, euro, pound sterling and yen. This move implies that the currency of the world's second-largest economy is increasingly regarded as a global financial instrument and will be increasingly used in transactions across the globe and widely traded on foreign exchange markets.

Lanjut baca ›

Bank Indonesia Governor Agus Martowardojo announced during a press conference that the central bank kept its benchmark interest rate (BI rate) at 7.50 percent during the Board of Governor's Meeting on 17 November 2015. Meanwhile, Bank Indonesia maintained the deposit facility rate and the lending facility rate at 5.50 percent and 8.00 percent, respectively. The current interest rate environment is considered sufficient to face persistent global uncertainties caused by the looming Fed Fund Rate hike and sluggish economic growth in the Eurozone and China.

Lanjut baca ›

On 15 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 current account balance, a stock market & rupiah update, Indonesia's credit rating, income tax, the bond market, biofuel, property, forest fires, and more.

Lanjut baca ›

Neraca transaksi berjalan di Indonesia membaik karena neraca perdagangan non minyak & gas (migas) yang lebih kuat. Defisit transaksi berjalan Indonesia menurun menjadi 4,0 miliar dollar Amerika Serikat (AS), atau 1,86% dari Produk Domestik Bruto (PDB), di kuartal ketiga tahun 2015. Performa ini jauh lebih baik dari defisit 7,0 miliar dollar AS (3,02% dari PDB) yang tercatat di kuartal 3 tahun 2014 atau 4,2 miliar dollar AS (1,95% dari PDB) di kuartal 2 tahun 2015. Sementara itu, neraca pembayaran menunjukkan defisit sebesar 4,6 miliar dollar AS, naik dari defisit 2,93 miliar di kuartal sebelumnya.

Lanjut baca ›

After Islamic New Year celebrations, Indonesia’s financial markets reopened on Thursday (15/10). The sharp appreciation of the Indonesian rupiah on Thursday morning is remarkable. By 10:10 am local Jakarta time, the rupiah had appreciated 2.36 percent to IDR 13,295 per US dollar (Bloomberg Dollar Index) hence extending last week’s gains when Indonesia’s currency strengthened around 9 percent against the greenback. Emerging markets assets are still gaining on signs that the Federal Reserve will not raise US interest rates in the short-term.

Lanjut baca ›

In Bank Indonesia's board of governors' meeting, which was held on Thursday (12/12), it was decided to maintain the country's benchmark interest rate (BI rate) at 7.50 percent. This decision was in line with market expectation but was unable to support the Jakarta Composite Index and rupiah exchange rate. The lending facility and deposit facility interest rates were also maintained at 7.50 percent and 5.75 percent respectively. Bank Indonesia decided not to change the rate as Indonesia's inflation outlook for 2014 is still within target.

Lanjut baca ›

ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the November 2013 edition, a number of important issues that are monitored include Indonesia's inflation rate, the trade balance, the current account deficit, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

Lanjut baca ›

Indonesia's Finance Minister Chatib Basri stated that the government of Indonesia is busy preparing three new policies that aim to restore financial stability as well as attract foreign direct investments. These three new policies involve the higher sales tax on imported luxury cars, a revision of Indonesia's negative investment list, and the higher income tax on imported consumption goods. These three new policies are in addition to the policy package that was introduced by the Indonesian government in August 2013.

Lanjut baca ›

Although widespread concerns about Indonesia's prolonged trade deficit (and current account deficit) are far from unfounded, the country's October 2013 trade data show a positive result. On Monday (02/12), Statistics Indonesia announced that Southeast Asia's largest economy posted a small trade surplus of USD $42.4 million in October after having recorded a trade deficit of USD $810 million in the previous month. This calender year (January to October 2013), the trade deficit has accumulated to USD $6.36 billion.

Lanjut baca ›

The Jakarta Composite Index (Indonesia's benchmark stock index which is also known as the IHSG) gained 0.53 percent on Friday (29/11) and ended on 4,256.43 points. Today's trading day was relatively quiet with a transaction value of only IDR 3.30 trillion (USD $276.50 million). Foreign net buying of Indonesian shares supported the IHSG index to end this month's last trading day on a positive note. Sectors that performed well were agriculture (+2.18 percent), construction (+1.27 percent), and mining (+0.99 percent).

Lanjut baca ›

On Friday (29/11), the last trading day of November 2013, the Indonesian rupiah exchange rate continued its downward spiral. The Jakarta Interbank Spot Dollar Rate¹ fell 0.39 percent to IDR 11,970 per US dollar amid concern about the winding down of the quantitative easing program, Indonesia's wide current account deficit, a disappointing US dollar-denominated bond auction and surging US dollar demand for earnings repatriation as well as foreign debt payment. Considering the full month of November, the rupiah depreciated 6.61 percent.

Lanjut baca ›

Currently, one of Indonesia's main financial issues (and one which puts serious pressures on the Indonesian rupiah exchange rate) is the country's wide current account deficit. According to data from Statistics Indonesia, Indonesia's current account deficit totaled USD $8.4 billion in the third quarter of 2013. This figure is equivalent to a whopping 3.8 percent of Indonesia's gross domestic product (GDP). Generally, a current account deficit that exceeds 2.5 percent of GDP is considered unsustainable.

Lanjut baca ›

The government of Indonesia will release two additional fiscal policy packages at the end of November or start of December that both aim to heal Indonesia's current account deficit. The two packages constitute follow ups of the policy package that was released in August 2013. Previously, deputy minister of Finance, Bambang Brodjonegoro, announced that an additional package would be released in October. However, it turned out that the government needed some more time to prepare the two additional packages.

Lanjut baca ›

On Thursday 14 November 2013, Agus Martowardojo, Governor of Indonesia's central bank (Bank Indonesia), delivered his end-of-the-year speech at the Annual Bankers’ Dinner. The meeting was attended by leaders from Indonesia's House of Representatives (DPR), economic ministers, leaders of the country's banking industry and business community, non-ministerial government agencies as well as a number of international institutions, thus representing a strategic forum in terms of the national economy.

Lanjut baca ›

Indonesia's benchmark stock index (IHSG) was not able to continue its rebound. On Friday (15/11), the IHSG fell 0.73 percent to 4,335.45 points amid widespread profit taking. Foreign investors recorded net selling of IDR 193 billion (USD $16.9 million) on today's trading day. Moreover, investors are concerned about the impact of the higher interest rate of the central bank (7.50 percent), particularly on the property and banking sectors in the fourth quarter of 2013.

Lanjut baca ›