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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

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

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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FINANCE

GOVERNMENT ADOPTS WB’S ACT RECOMMENDATION : MINISTER

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Finance Minister, Sri Mulyani Indrawati.

Greatindonesia.co.id, Jakarta – Finance Minister, Sri Mulyani Indrawati, said the government has adopted the principles of Augment, Connect, Target (ACT) recommended by the World Bank to manage the rapid pace of urbanization in Indonesia.

“Indonesia has imposed the principles as recommended by the World Bank,” Indrawati said here on Thursday (3/10/2019).

The World Bank’s recommendation is aimed at managing urbanization in Indonesia, which has grown rapidly, but with a slower pace of development, hence it has hampered the distribution of prosperity, inclusiveness and the development of a livable city.

In its report, the World Bank said to ensure that Indonesia gets the most out of urbanization, policymakers need to undertake bold institutional reforms and implement decisive policies to ACT.

Augment the coverage and quality of basic services and urban infrastructure to better manage forces of congestion and address large disparities in human capital outcomes both across and within places.

Connect urban areas of different sizes with each other, with surrounding rural areas, and with international markets – and to connect people with jobs and basic services within urban areas – to enhance inclusiveness both within and among areas.

Target places and people that may be left behind by the urbanization process to ensure that they share in the benefits of urbanization and that urban areas are livable for everyone.

“All these have been included in the State Budget 2020,” Indrawati said.

The state budget has allocated Rp508.1 trillion for human resource development and Rp132 trillion for the health sector.

“We have also allocated Rp372.5 trillion for social security through the schemes of the Family Hope Card, the Smart Indonesia Card, and non-cash assistance,” she added.

The government has also allocated Rp423.3 trillion in the 2020 state budget for the development of infrastructure to support urban cities, which are livable for all Indonesians.

Related news: New capital city to accommodate population of three million: minister

Indrawati said that all the cities in Java Island have been connected and the development would be expanded to other islands outside Java.

The government would prepare all the instruments needed to encourage urbanization to contribute more to economic growth, which would further improve the welfare of the people.

“We will need other instruments to encourage development in urban cities, as well as regions to address the problem of inequality,” she continued. (afd)

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