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Today's Headlines Rupiah

  • Weakening of Indonesian Rupiah Against US Dollar is Part of Global Trend

    According to various analysts and the central bank of Indonesia, the weakening of the IDR rupiah should not be too alarming as there currently is a global trend in which currencies, worldwide, weaken against the US Dollar. This situation is triggered by the economic recovery that has been experienced by the world's largest economy recently. Compared to other ASEAN members, the rupiah's decline is normal. The central bank adds that foreign capital inflows will return and will strengthen the country's currency.

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  • Bank Indonesia: Indonesia's Inflation Rate will Ease to 4.5% in 2014

    The central bank of Indonesia (Bank Indonesia) expects inflation to moderate to 4.5 percent in 2014 if the country's current account balance can be turned into a surplus. Currently, Indonesia's trade balance shows a deficit as global demand for Indonesia's commodities has reduced due to international economic turmoil, while Indonesia continues to import large quantities of oil. If the deficit can be reversed into a surplus it will curtail inflation and automatically have a positive impact on Indonesia's currency (IDR rupiah).

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  • New Macroeconomic Assumptions in Indonesia's Revised State Budget

    DPR MPR Building Government of Indonesia Investments

    After a long plenary session on Monday (17/06), Indonesia's House of Representatives (DPR) and the government have agreed to the revised 2013 State Budget (APBN-P). The revision was needed as original macroeconomic assumptions began to fall out of tune with reality. Due to global and domestic conditions a number of assumptions needed to revised down. Most controversial decision that was taken is the increase in price of subsidized fuel by 44 percent to IDR 6,500 (USD $0.66) per liter.

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  • Bank Indonesia Raises its Interest Rate to 6.0% to Support the Rupiah

    Bank Indonesia - BI - Interest Rate Increase 6% - Indonesia Investments

    The central bank of Indonesia (Bank Indonesia) decided today to raise its benchmark interest rate by 25 basis points to 6.0 percent. The decision was made amid concerns about the inflationary impact of a hike in subsidized fuel prices (planned this June) as well as increasing uncertainty in global financial markets as central banks' may scale back stimulus programs. The Indonesian rupiah has weakened considerably in 2013 and forms the worst performer in Asia after the Japanese yen among the 11 most-traded currencies tracked by Bloomberg.

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  • Central Bank Uses Foreign Exchange Reserves to Support the Rupiah

    To ease pressures on the IDR rupiah, Indonesia's central bank has used about USD $2.0 billion of its foreign exchange reserves to support the currency as the country's continuing trade deficit as well as concerns about the possible increase in price of subsidized fuel in June has caused much uncertainty about the level of inflation in the near future and puts downward pressure on the rupiah. Indonesia's foreign exchange reserves fell to USD $105.2 billion in late May 2013 from USD $107.3 billion at the end of April.

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  • Large Outflow of Funds From Indonesia's Main Stock Index on Friday

    Yesterday (07/06), the main index of the Indonesia Stock Exchange (IHSG) fell by a total of 2.7 percent to close at 4,865.32 points. The size of this single day fall of Indonesia's IHSG has not been seen since November 2011 and illustrates waning confidence in Indonesia's economy. For eleven days in a row, foreign investors have been engaged in net selling as they have been concerned about ongoing uncertainty regarding the price hike of subsidized fuel, the continuing trade deficit as well as the steady fall of the IDR rupiah.

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  • Rajasa: Indonesian Government Targets GDP Growth of 6.2% in Q2-2013

    Rajasa: Indonesian Government Targets GDP Growth of 6.2% in Q2-2013

    Indonesia's minister of Economy, Ir. M. Hatta Rajasa, stated that the government of Indonesia intends to realize economic growth of at least 6.2 percent in the second quarter of 2013 in order to remain on track for 6.3 percent growth for full year 2013. Although he reminded that it will take hard effort to realize this target, his message contained more optimism than Finance minister Chatib Basri's statement earlier this week who sees 6.0 percent of economic growth as the limit in Q2-2013.

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  • Indonesia's P/E Ratio Relatively Low Compared to Regional Economies

    PE Ratio Indonesia Stock Exchange Indonesia Investments

    Indonesian newspaper Investor Daily reported that stocks at the Indonesia Stock Exchange are still relatively cheap compared to regional stock indices. Currently, the price to earnings ratio (P/E ratio) of Indonesia's main index is about 18. In contrast, South Korea's Kospi index amounts to 34, Japan's Nikkei 28, Taiwan's Taiex 23, and Philippines' PSE stands at 23 times earnings. As the Indonesian economy as well as its companies' profit figures are projected to grow, the P/E is expected to fall to 16 this year.

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  • Indonesia's Central Bank Expects National Economy to Grow by 6.3-6.8 Percent

    Indonesia's central bank (Bank Indonesia) expects the Indonesian economy to grow between 6.3 and 6.8 percent in 2013, supported by strong domestic consumption and foreign investment, with inflation rising by about 4.5 percent. Indonesian exports are expected to increase due to better global demand for Indonesia's commodities such as coal and palm oil, with commodity prices rising accordingly. But some problems in Indonesia's financial system remain to be solved.

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  • Indonesia's Central Bank Continues Historic Low Key Interest Rate

    Central Bank of Indonesia - BI - Bank Indonesia - Indonesia Investments

    Bank Indonesia, the country's central bank, continued its key interest rate at the level of 5.75 percent. The interest rate has been at this historic low level for the 12th month in a row. The current policy rate is "considered consistent with the contained inflationary pressure in accordance with its target range of 4.5 percent ± 1 percent in 2013 and 2014," according to the website of Indonesia's central bank.

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Latest Columns Rupiah

  • Debt Restructuring Trikomsel Oke, S&P Warns of Indonesian Defaults

    Debt Restructuring Trikomsel Oke, S&P Warns of Indonesian Defaults

    American financial services company Standard & Poor's warns that defaults by Indonesian companies are a serious threat over the next 18 months given their eroded balance sheets amid the country's current economic slowdown. The warning came after Indonesian mobile phone retailer Trikomsel Oke announced plans to restructure about USD $155 million worth of debt as it may not be capable to meet obligations indefinitely.

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  • Morgan Stanley & Moody's on Indonesia's Rupiah & Policy Package

    Morgan Stanley & Moody's on Indonesia's Rupiah & Policy Package

    Both Morgan Stanley and Moody's Investors Service have cast some negative perceptions on the condition of the Indonesian economy. First, American multinational financial services corporation Morgan Stanley released a report in which it stated that the recent rupiah rally will not last (Morgan Stanley maintains its year-end target of IDR 14,000 per US dollar). Then, global credit ratings agency Moody's criticized Indonesia's recently unveiled third policy package in which the government lowers energy prices for local manufacturers in a bid to support the industry.

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  • What are the Stimulus Measures in Indonesia's Third Economic Policy Package?

    What are the Stimulus Measures in Indonesia's Third Economic Policy Package?

    The government of Indonesia unveiled the last installment of a series of three stimulus packages on Wednesday (07/10). The first two installments had been unveiled last month. In general, these stimulus packages aim to boost economic growth of Indonesia (which has slowed to a six-year low) and restore investors' confidence in the Indonesian rupiah and stocks. When markets believed that the Federal Reserve would soon raise its key interest rate, Indonesia was plagued by severe capital outflows pushing the rupiah to a 17-year low.

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  • Second Installment Economic Policy Package Indonesia

    Second Installment Economic Policy Package Indonesia

    The government of Indonesia unveiled the second installment of its September economic policy package on Tuesday (29/09). The package is introduced in an attempt to boost economic growth in Southeast Asia’s largest economy and defend the ailing rupiah. Indonesia’s GDP growth slowed to a six-year low of 4.67 percent (y/y) in Q2-2015, while the rupiah has depreciated to a 17-year low against the US dollar. Capital outflows from Indonesia are the result of monetary tightening in the USA, low commodity prices and sluggish global economic growth (particularly China’s hard landing).

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  • Bank Indonesia Press Release: BI Rate Held at 7.50% in September

    Bank Indonesia Press Release: BI Rate Held at 7.50% in September

    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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  • Market Update: Why Indonesian Stocks & Rupiah Strengthen on Friday?

    Market Update: Why Indonesian Stocks & Rupiah Strengthen on Friday?

    After a real roller coaster ride, Indonesia’s benchmark stock index (Jakarta Composite Index) climbed 0.35 percent to 4,446.20 points at the end of the trading week. The majority of key stock indices across the globe tended to strengthen on Friday after a week characterized by severe volatility amid concern about the economic situation in China.

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  • Indonesia’s Currency still above 14,000 per USD, Why a Weak Rupiah is a Problem

    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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  • Press Release Bank Indonesia: BI Rate Held at 7.50% in August 2015

    Press Release Bank Indonesia: BI Rate Held at 7.50% in August 2015

    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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  • Weaker Yuan Likely to Weigh on Indonesian Businesses

    Weaker Yuan Likely to Weigh on Indonesian Businesses

    For most of this year, the financial media has held a generally positive tone. There have been some exceptions in cases like the Eurozone which is still mired in a deeply divided sovereign debt crisis. But for most of the world, 2015 has been a positive period in terms of general growth in their broad trends. So it might be easy for macro investors to assume that most markets are currently establishing themselves in the bullish direction.

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  • Currency Update: Why Indonesia’s Rupiah Touches a 17-Year Low

    Currency Update: Why Indonesia’s Rupiah Touches a 17-Year Low

    The Indonesian rupiah touched a 17-year low as the currency continued to depreciate amid persistent bullish US dollar momentum. The rupiah weakened to IDR 13,539 per US dollar according to the Bloomberg Dollar Index on Friday (31/07). The US Commerce Department announced on Thursday (30/07) that US gross domestic product (GDP) expanded at 2.3 percent (year-on-year) in the second quarter of 2015, giving rise to heightened expectation that the US Federal Reserve will raise its key interest rate soon.

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