Indonesian financial market keep sagging amid the various negative news from global and domestic - Photo: Special
JAKARTA (TheInsiderStories) — Good morning! After five days of durability, Rupiah lost its energy and depreciated by 0.21 percent. The currency dip was caused by some foreign factors, such as people’s fear over Brexit, Italy state budget, and US-China trade war. Furthermore, countries’ economic growth slowdown is also a scrutiny.
The Jakarta Composite Index was worse, downturning by 0.95 percent to 5,948.05. Amid the  major deterioration, basic industry and chemicals, consumer good industry, property, and manufacture sectors closed in green territory.
Indonesia’s three biggest banks, PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Bank Mandiri Tbk (IDX: BMRI), and PT Bank Central Asia Tbk (IDX: BBCA) were on the top five laggard. Foreign net sell recorded at Rp587.04 billion (US$39.93 million).
For domestic side, Bank of Indonesia (BI) predicted that 2019 economic growth will not be way different compared to 2018. Next year’s macro assumption projection is at 5.3 percent.
While for this year, the central bank estimated Indonesia economic growth at 5.1-5.2 percent lower than its previous prediction at 5.3-5.4 percent. The stagnant economic growth, BI stated, is not only happening in Indonesia.
Furthermore, Indonesia Deposit Insurance Corporation saw the risk of banking liquidity tightening until the end of this year. During January to September, the loan grew by 12.69 percent and savings growth was only 6.6 percent.
Some banks in category three—book banks with Rp5 trillion to Rp30 trillion core capital—has the highest loan to deposit ratio (LDR) at 103 percent. This will potentially boost high interest rate competition among banks.
On the other hand, the agency projected the loan growth will not occur for a long time due to some risky factors, such as limited savings growth and interest rate raise as an effect of the reference rate increase. This year, Indonesia’s loan and savings growth this year is estimated at 11.5 percent and 7.2 percent. So average the LDR will be at 93.2 percent.
Then, Government just admitted the reasons of light rail transit and Jakarta-Bandung high speed train construction suspension. There is an overlapping land between those two projects. Besides, the construction of those transportation projects has caused bad congestion in Jakarta-Cikampek toll road.
From the global side, CEO of Renault-Nissan-Mitsubishi Carlos Ghosn is detained after arriving in Japan’s airport over financial fraud. He caught falsifying financial statements and using company assets for personal gain.
At least 5 billion Yen of Ghosn’s income in five years weren’t reported. He will be detained for the next 10 days.
Ghosn is an influential figure inautomotive industry. He saved Nissan by establishing an alliance with Renault. His idea of technology-sharing between carmakers is considered as a brilliant concept by the industry.
May you have a profitable day!
US$1: Rp14,700
Written by Linda Silaen and TIS Intelligence Team, Please visit our new website to get more insight on Indonesia’s economy: