Market & Fed Rate
As expected the Federal Reserve on Wednesday (Sep 26) raised the target range for the federal funds rate by 25bps to 2%-2.25%. Policymakers increased growth forecasts for 2018 and expect one more rate hike this year.
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Banking: Liquidity Issue
Indonesia’s Deposit Insurance Agency (LPS) recorded that loan to deposit ratio (LDR) of the banking industry reached 93.11% per July 2018, higher than 89.20% in the previous month, reflecting a tightening of liquidity. This would prompt big scale banks and medium scale banks to raise their special rates on deposit and attract depositors.
Read MoreShort Term Pressure
The rupiah continued to weaken to Rp14,711 against the U.S. dollar on Friday last week (Aug. 31), gradually approaching a two-decade low. The rupiah depreciation is in line with the performance of most other emerging market currencies amid broad-based U.S. dollar strength, Indonesia is ranked in the top ten of hardest-hit currencies so far in 2018.
Read MoreBI to Lower Hedging Cost via Swap Transaction
Central bank (Bank Indonesia/BI) plans to take measures to lower the cost of foreign currency hedging via swap transaction. The decision is followed President Joko Widodo’ instruction to bring more foreign currencies to the...
Read MoreImpressive Gain
After falling 4.3% last week, the composite index of the Indonesia Stock Exchange (IDX) made an impressive rebound or gain on Monday (Aug. 20) along with improving rist appetite ahead of China-U.S. trade talks due later this week.
Read MoreBI 7-day RR Rate Lifted to 5.5%
The central bank (Bank Indonesia/BI) today decided to lift its benchmark interest rate, BI 7-day repurchase repo rate by 25 basis points (bps) to 5.5%. Deposit facility and lending facility are also lifted by 25 bps each, to...
Read MoreThe Rupiah
The rupiah weakened further to Rp14,625 against the U.S. dollar on Tuesday (Aug 14), extended correction on Monday, but the central bank (Bank Indonesia/BI) confirmed to have intervened the local currency. The rupiah since Monday passed beyond the psychological boundary of Rp14,600 per U.S. dollar level—its lowest level since October 2015—puts additional pressure on the Indonesian currency as it encourages more people to seek safe haven assets, such as the U.S. dollar or Japanese yen.
Read MoreBI Issues BI Certificate to Boost Capital Inflow
Central bank (Bank Indonesia/BI) issues 9-month and 12-month BI certificate on Monday (July 23) to boost capital inflow. BI has conducted socialization related to the auction. BI enforces a 7-day holding period for the...
Read MoreBanking Update
Indonesia’s central bank (Bank Indonesia/BI) indicates a higher growth in new loan for the second quarter (Q2) of 2018, and a strong growth in Q3 this year. BI said that banks will tighten loan disbursement through lifting lending rates and limiting the loan ceiling, mainly loan for investment and working capital.
Read MoreImproving Economy
Indonesia’s Central Bank (Bank Indonesia/BI) reported on Thursday (July 12) that the national economy growth signaled a better growth this year and confirmed its strong growth, inline with the improving installed production capacity in all business segments—agriculture, industry, electricity, gas, and drinking water.
Read MoreTrade War
Several Indonesian ministers met on Sunday (July 8) at the office of the Coordinating Minister for the Economy to discuss the escalating trade war tension between the U.S. and China. Said ministers formulated strategies and policies to anticipate the impact of said trade war, and another Fed rate hike.
Read MoreProperty & LTV Policy
Indonesia’s central bank (Bank Indonesia/BI) has recently relaxed the loan-to-value (LTV) ratio in order to maintain domestic economic recovery momentum and financial system stability, keeping into account the prudential principles and consumer protection. The policy will be effective August 1, 2018. By lowering down payment obligations for the consumer, BI aims to make it more attractive for consumers to purchase property using House Ownership Credit (KPR), hence boosting overall credit growth as well as Indonesia’s macroeconomic growth.
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