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HOUSE APPROVES 2020 ECONOMIC GROWTH TARGET OF 5.5%

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Government representatives in a meeting with the House of Representative's Budget Agency in Jakarta on Monday (8/7/2019).

Greatindonesia.co.id, Jakarta – The Budget Academy of the Indonesian House of Representatives (DPR) approved an economic growth target of between 5.2 percent and 5.5 percent for 2020, based on the macro-economic predictions of the 2020 Draft State Budget.

The approval was made during a meeting between the DPR Budget Agency, the Ministry of Finance, the Bank of Indonesia and the Ministry of National Planning and Development, which was held in Jakarta Monday (8/7/2019).

“The outcomes of this meeting are subject to further discussion and include the basic pillars of the 2020 State Budget Bill, along with relevant financial data,” the meeting’s chairman, Kahar Muzakir said.

The meeting also discussed several key issues, such as national macro-economic predictions, related macro-fiscal frameworks, such as state revenues and expenditures, and national development targets for 2020.

The parliament approved the government’s proposed economic growth target, which is estimated to range from 5.2 percent to 5.5 percent, John Kenedy Azis (Member of the House Representative’s Budget Agency) explained, adding that the government also estimates annual inflation to be two percent to four percent while the exchange rate of the Rupiah (Rp) against the US dollar is expected to be between Rp14,000 and Rp14,500 per dollar.

Regarding national development targets for 2020, the unemployment rate is estimated to be between 4.8 percent to 5.1 percent, and poverty rate from 8.5 percent to 9.5 percent, and Gini ratio from 0.375 to 0.380, and human development index at 72.51 percent.

During the meeting, Sri Mulyani Indrawati (Minister of Finance) expressed his appreciation for the key role of the DPR Budget Agency in developing the initial plan of the Draft State Budget, before it is finalized as the 2020 State Budget.

“We would like to thank all the working committees. We will take all inputs into account. If there are any changes, we will certainly declare them,” Indrawati said. (hep)

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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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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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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