Jakarta- Market still continue to do the calculations after the victory of Donald Trump as the President of the US, defeated Hillary Clinton. Although Trump began to soften toward his campaign promises, but the market has recorded everything that he promised during the campaign. As a result, the stock market and finance in Indonesia is still depreciating.
Index and the rupiah was corrected, but the Government, the Financial Services Authority, the stock exchange authorities agree there is nothing to worry about in the Indonesian financial market because in general, Indonesia’s fundamentals are still showing improvement.
Just look at the trade balance data recently released the Central Bureau of Statistics yesterday, Indonesia still recorded a surplus of US $ 1.21 billion, shows the trading activity Indonesia has returned to the state in 2014. Inflation is still low stable, with a stable economic growth of 5% to enter third quarter.
US Election results beyond market expectations, triggering fears of investors around the world, including Indonesia, as a result, the room for Bank Indonesia to loosen monetary policy, will be retained. Bahana Securities economist Fakhrul Fulvian revise projections BI policy rate by looking at market developments post-victory Trump.
” We expect Bank Indonesia will hold interest rates until the first quarter of next year for the stabilization of the market after seeing volatility in the market today, “said Fakhrul ‘room for monetary easing may be open in the second quarter 2017, after the movement of the US economy and policy elected president more clearly, “he added.
Although interest rates on hold at 4.75% level, it will not disturb Indonesia’s economic growth until the end of the year, the article will be greater government spending before the close of the year. Last month, the Board of Governors of Bank Indonesia decided to cut the benchmark interest rate BI 7-day repo rate by 25 basis points to 4.75% to encourage credit growth, which in turn will sustain higher economic growth ahead.
”Bank Indonesia needs to hold interest rates to stabilize the exchange rate and increase confidence in the market, and suggests that the central bank’s response to developments in the market at any time, so that the internal and external equilibrium is maintained, “said Fakhrul.
For a while government bond yields increased significantly. Bahana estimates, reflecting the market conditions that occurred in 2013, when the decline occurs very quickly then this condition will reverse quickly, as long as the government continues to improve domestic fundamentals and are able to convince the market that the Indonesian security is guaranteed.
With trouble coming from today’s global economy, governments need to improve fiscal particularly related to government spending, so that investors can see that Indonesia’s economic fundamentals remain intact.