It is important to put Indonesia into international context because decisions that are made by Indonesian policymakers are (partly) based on global developments.
For example, the rupiah performance and Bank Indonesia’s monetary policy stance are to a very large extent influenced by international developments such as monetary policy in the United States (including market participants’ expectations of looming US monetary policy changes), the USA-China tariff war, or the movement of global crude oil prices. In this article we discuss the latest developments of these key issues.
US Federal Reserve
In April 2019 expectations increased that the US Federal Reserve is not to alter its benchmark interest rates for an extended period. Federal Reserve Chairman Jerome Powell confirmed this during a news conference on Wednesday 1 May 2019 when he said that “we do think our policy stance is appropriate right now. We don’t see a strong case for moving in either direction”.
This view is in line with the Federal Reserve’s previous policy meeting (in March 2019) when it signaled no rate changes for the remainder of 2019. In that March meeting, the Federal Reserve said low measures of inflation, concern over global economic growth, and tightening financial conditions warranted pausing on interest rate hikes while policymakers reassess the data.
This article discusses the following:
• Update on the Federal Reserve's latest monetary policy meeting
• Updates on economic growth of the USA and China
• Update on the USA-China tariff war
• Update on crude oil prices
Read the full article in the April 2019 edition of our monthly research report. You can purchase the report by sending an email to email@example.com or a WhatsApp message to the following number: +62(0)8788.410.6944
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