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INDONESIA’S PRIVATE CONSUMPTION RISES TO 5.3 PERCENT : WORLD BANK

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World Bank chief economist for Indonesia, Frederico Gil Sander.

Greatindonesia.co.id, Jakarta – Indonesia’s private consumption rose to 5.3 percent in the first quarter of 2019 from 5.2 percent in the fourth quarter of 2018, according to the World Bank.

“The moderately sufficient increase in the private consumption is projected to continue,” World Bank chief economist for Indonesia, Frederico Gil Sander, said during the launch of the June 2019 edition of the Indonesia Economic Quarterly in Jakarta on Monday (1/7/2019).

Sander said the growth was fueled by a fairly significant rise in the consumption budget of political parties, which grew 16.3 percent in the first quarter compared to 10.8 percent in the fourth quarter of 2018.

However, household consumption slowed down to 5.0 percent from 5.1 percent due to the declining consumption in the service sector, including transportation, communication, restaurants and hotels, he said.

Of the household consumption, food and beverage consumption contributed the most to the growth of the private consumption, he said.

Meanwhile, consumption in the health and education sector rose at its fastest pace.

Sander further said the growth of retail sales, which almost doubled to 8.8 percent in the first quarter of 2019, also served as a monthly indicator of strong private consumption.

The sale of motorcycles also rose significantly to 16.1 percent in the first quarter of 2019 from 7.6 percent in the previous quarter.

However, Indonesian consumer confidence, which remained flat in the first quarter of 2019 showed signs of increasing in April and May. This could be seen from the increase in private consumption, which continued in the second quarter, he said. (mhs)

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FINANCE

RUPIAH STRENGTHENS SLIGHTLY FOLLOWING BI INTERVENTION

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Bank Indonesia (BI) intervened in the foreign currency and bond markets through domestic non-deliverable forwards (DNDF) to stabilize the local unit.

Greatindonesia.co.id, Jakarta – The rupiah strengthened slightly against the United States (US) dollar in the Jakarta interbank market Tuesday (8/10/2019) evening following Bank Indonesia’s intervention in the money market. The rupiah rose one point, or 0.01 percent, to Rp14,162 against the dollar compared to Rp14,163 earlier.

Bank Indonesia (BI) intervened in the foreign currency and bond markets through domestic non-deliverable forwards (DNDF) to stabilize the local unit, PT Garuda Berjangka Director Ibrahim Assuaibi said in Jakarta Tuesday (8/10/2019).

“The intervention has successfully prevented the Garuda currency from weakening although Bank Indonesia announced yesterday the country’s foreign exchange reserves which nosedived by US$2.12 billion to $124.32 billion as of late September compared to a month earlier. The drop is the first in the three past months,” he said.

The country’s foreign exchange reserves fell in September 2019 due to the repayment of the government’s foreign debts and the declining placement of foreign currencies by the banking industry in the central bank which has three times lowered its benchmark interest rate since early this year.

The government paid an interest of Rp172.42 trillion from January to August 2019, up 6.25 percent compared to the same period last year.

On the external side, hope for peaceful trade negotiations between the US and China again became the main topic Tuesday. The latest report shows China is more doubtful of reach a wide-ranging trade agreement.

The trade tension between the two countries escalated several days before the talks began when the US reportedly blacklisted eight Chinese technological companies Monday, October 7, on charges of human rights violations against the Muslim minority in Xinjiang province.

The rupiah opened lower in the morning trade at Rp17,175. Throughout the day, it fluctuated between Rp14.137 and Rp14,175 against the dollar. (cam)

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FINANCE

IHSG INDEX CLOSES LOWER OVER FOREX RESERVE PLUNGE

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The IHSG closed, with net foreign buying recorded at Rp144.84 billion.

Greatindonesia.co.id, Jakarta – The Jakarta composite index (IHSG) closed lower on Monday evening due to a dip in Indonesia’s foreign exchange reserves in September 2019.

The index of the Indonesian Stock Exchange (BEI) plummeted 60.67 points, or one percent, to reach 6,000.58, while the index of the 45 most liquid stocks fell 11.6 points, or 1.23 percent, to 931.04.

“The country’s foreign exchange reserves that declined to US$124.3 billion, from US$126.4 billion, spurred investors into profit taking, thereby causing the IHSG to nosedive,” Binaartha Sekuritas analyst M. Nafan Aji Gusta remarked in Jakarta on Monday (7/10/2019).

An hour after opening stronger, the IHSG weakened and remained in the red zone all through the day.

The IHSG closed, with net foreign buying recorded at Rp144.84 billion.

Trade on Monday was recorded, with 445,575 transactions, and 17.22 billion shares, worth Rp7.39 trillion, changing hands. Gainers were outnumbered by decliners, with 131 shares against 272 shares, with 139 shares remaining unchanged.

Regional markets, such as the Nikkei Index, plunged 34.95 points, or 0.16 percent, to 21,375.25, while the Straits Times Index strengthened 21.12 points, or 0.69 percent, to 3,099.48. (cam)

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FINANCE

INDONESIA’S FOREX RESERVES DIP TO US$124.3 BILLION AT 2019 SEPT-END

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Director of the Communication Department of Bank Indonesia, Junanto Herdiawan.

Greatindonesia.co.id, Jakarta – Indonesia’s foreign exchange (forex) reserves were recorded at US$124.3 billion at the end of September 2019, a drop from $126.4 billion during the corresponding period a month earlier.

At $124.3 billion, the September-end forex reserves stood above the international adequacy standard of three months of imports and was equal to 7.2 months of imports or seven months of imports and official external debt payments.

“Bank Indonesia assesses that foreign exchange reserves are able to support the resiliency of the external sector and maintain the stability of macroeconomic and financial systems,” Director of the Communication Department of Bank Indonesia Junanto Herdiawan noted in a statement in Jakarta on Monday (7/10/2019).

Herdiawan emphasized that the dip in forex reserves in September 2019 was chiefly influenced by the payment of government foreign debt and reduced placement of foreign exchange banking at Bank Indonesia.

Going forward, he affirmed that Bank Indonesia views foreign exchange reserves to remain adequate, bolstered by stability and a favorable economic outlook. (abh)

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