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RUPIAH FALLS OVER RUMOURED FED FUND RATE DROP

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The rupiah traded at Rp14,241 per US dollar on Thursday (13/6/2019) morning. Throughout the day, the rupiah moved within the range of Rp14,241 to Rp14,280 per US dollar.

Greatindonesia.co.id, Jakarta – The rupiah fell against the US dollar in the Jakarta inter-bank market on Thursday (13/6/2019) evening due to a rumoured decline in the Fed Fund rate.

The local unit declined 39 points, or 0.27 percent, to close at Rp14,280 per US dollar, compared to Rp14,241 per dollar earlier.

PT Garuda Berjangka President Director Ibrahim Assuaibi said in Jakarta on Thursday (13/6/2019) that a number of US economic indicators pointed towards a slowdown.

“Hence, it is not surprising that the Fed will lower its benchmark interest rate in the near future,” he said.

The first signal of the US economic slowdown was seen in the initial reading of the IBD/TIPP economic optimism index for June, which remained at 53.2, well below the previous 58.6, the highest in the past 15 years.

The second signal was the US producer inflation for May, which was recorded at 0.1 percent month-on-month (mom), slowing down from 0.2 percent (mom) in April. The third signal was the creation of new jobs in the US, which reached 7.4 million, as indicated by the Job Openings and Labor Turnover Survey (JOLTS), down from 7.5 million one month earlier.

Meanwhile, the rupiah traded at Rp14,241 per US dollar on Thursday (13/6/2019) morning. Throughout the day, the rupiah moved within the range of Rp14,241 to Rp14,280 per US dollar.

According to the Bank Indonesia mid rate, the rupiah weakened to Rp14,270 against the US dollar, compared to the previous level of Rp14,234 per US dollar. (cit)

FINANCE

GOVT’S EXTERNAL DEBT MANAGEMENT PRIORITIZED TO FINANCE DEVELOPMENT : BI

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Such developments showcased a solid structure of Indonesia’s external debt in spite of an uptick in its position.

Greatindonesia.co.id, Jakarta – The government’s external debt management was prioritized to finance development, dominated in productive sectors to drive growth, in addition to boosting public welfare.

Public welfare improvement encompassed the human health & social work activities sector, constituting 19 percent of the government external debt; construction sector, 16.4 percent; education sector, 16 percent; public administration & defense sector, 15.2 percent; and financial & insurance sector, 13.9 percent, according to Bank Indonesia’s (BI’s) statement here on Monday (16/9/2019).

The private external debt rose in line with the investment requirements in several leading sectors.

The private external debt outstanding at the end of July 2019 increased 11.5 percent (yoy), an 11.1 percent yoy rise than that of the previous month.

The increase principally stemmed from the issuance of global bonds by non-financial corporations.

Private external debt was dominated by the financial & insurance sector; manufacturing sector; electricity, gas, & water supply sector; and mining & drilling sector. The share of external debt in these four sectors to the total private external debt reached 76.6 percent.

Indonesia’s external debt maintained a healthy structure, backed by the prudential principle application in its management.

The condition was mirrored in, among others, Indonesia’s external debt-to-gross domestic product ratio at the end of July 2019 at 36.2 percent, down from the previous month.

In addition, Indonesia’s external debt structure continued to be dominated by long-term debt, constituting 87.6 percent of the total external debt.

Such developments showcased a solid structure of Indonesia’s external debt in spite of an uptick in its position.

BI, in close coordination with the government, has continually monitored external debt by promoting the application of prudential principles, in its management to maintain a healthy external debt structure.

Furthermore, the role of external debt will be optimized in supporting development financing without incurring the risks that may impact macroeconomic stability. (akm)

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FINANCE

INDONESIA’S STOCK, BONDS MARKET ATTRACTIVE : INVESTMENT STRATEGIST

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Amidst the current low interest rates, Indonesian bonds are very attractive because they still provide high yields.

Greatindonesia.co.id, Jakarta – The Indonesian stock and bond market remains an attractive option amid the global economic turmoil, an investment strategist at an asset management corporation in Indonesia believes.

“The stock market still provides attractive investment opportunities because of its valuation. There is also the potential growth of the corporation’s profit which is estimated to be around nine percent this year,” the Chief Economist and Investment Strategist Manulife Asset Management Indonesia, Katarina Setiawan, said in a statement received here, Monday (16/9/2019).

Going forward, there are several catalysts for the stock market, including further interest rate cuts by Bank Indonesia, accelerated policy reforms by the government, improved data on economic activity, and corporate tax cuts, she stated.

Amidst the current low interest rates, Indonesian bonds are very attractive because they still provide high yields.

“The central bank’s commitment to safeguarding the Rupiah exchange rate and the bond market provides a positive sentiment for Indonesian bonds,” she said.

Turmoil and volatility in the financial markets are not uncommon, she said advising investors to always keep an eye on every development.

“Keep in mind that there are always opportunities in every condition, even amidst high global volatility. Do not be afraid to invest and adjust your investment portfolio, with targeted investment objectives and time frames,” she said. (INE). (cta)

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RUPIAH WEAKENS OVER CONCERN ABOUT GLOBAL RECESSION

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The Indonesian currency fell 18 points, or 0.13 percent, to close at Rp14.053 per US dollar compared to Rp14.035 earlier.

Greatindonesia.co.id, Jakarta – The rupiah weakened against the US dollar in the Jakarta interbank market on Tuesday evening over fears of a global economic recession.

The Indonesian currency fell 18 points, or 0.13 percent, to close at Rp14.053 per US dollar compared to Rp14.035 earlier.

“The market still has doubts about it and is waiting for certainty about the monetary policy from the meeting of the European Central Bank (ECB) that will be made known Thursday,” PT Garuda Berjangka President Director Ibrahim Assuaibi said in Jakarta Tuesday.

The ECB is expected to slash the deposit interest rate and offer stimulus including the buyback of bonds.

As reported earlier, factories in the European zone particularly Germany are struggling to withstand growth slowdown as a result of the US-China trade war. Hence, ECB President Mario Dragh will not remain silent from attempts to stabilize the European economy.

On the internal side, if the market remains volatile as a result of the trade war and Brexit, the central bank will again intervene in the market through a monetary policy mix to make the market attractive, Ibrahim believed.

“Looking ahead, BI (Bank Indonesia) and the government will continue to encourage the economy, take pre-emptive measures and be vigilant against the global condition and make a policy to facilitate foreign investment in the country,” he said.

The rupiah strengthened Rp14.030 against the US dollar Tuesday morning. Throughout the day, the rupiah hovered between Rp14.026 and Rp14.055. (ctr)

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