JAKARTA (TheInsiderStories) — Good morning! Today, Indonesian central bank (BI) will announce its monetary stance amid the global economic challenges. Last March, BI maintained its benchmark rate at 6 percent.
This year, Investment Coordination Board is optimistic in achieving investment target at Rp792.3 trillion (US$56.59 billion), seeing the recent foreign inflow to emerging market. The board considered that trade war tension is calming and the Federal Reserves policy is easing.
Both are giving a good sentiment for the market. While last year, Indonesia’ investment realization only reached 94.3 percent target worth of Rp only rose four percent compared to previous year worth of Rp721.3 trillion.
Furthermore to support the capital inflows, Indonesia will release super deduction tax as an incentive in the first semester. Government has agreed on giving the incentive by 200 percent for vocational education industry and 300 percent to industry involves in research and development for innovation. So far, there are 36 expertise competency suggestions that can receive the super deduction tax.
Meanwhile, Secretary of Coordinating Ministry for Economy, Susiwijono Moegiarso mentioned that Indonesia’ trade balance deficit could be widen from next year. Even though the first quarter’ trade balance deficit is only US$190 million, but the potency to swell more than $8.57 billion deficit last year is existing. He said, Indonesia is now trying to manage some policy to prevent the further deficit widening such as preparing import substitution.
Chinese President Xi Jinping will open Belt and Road Summit today in Beijing. 37 heads of state and more than 5,000 government officials and business leaders will met in the country’ most important diplomatic event of the year.
The BRI is a key policy of President Xi and envisions rebuilding the old silk road to connect China with Asia, Europe and beyond with massive infrastructure spending.
Indonesian Rupiah continued depreciating by 0.22 percent ahead of Bank of Indonesia’ 7-Day Reverse Repo rate (7-DRR rate) announcement. Rupiah against US dollar has been weakening in the last few days, after nearly reach 14,000.