JAKARTA (TheInsiderStories) — Good morning! United States bond market’ yield curve showed ominous sign of a recession. Yesterday, US 10-year bond yield fell deeply which signaled there is economy recession risk.
Senior Deputy Governor of Bank Indonesia (BI) Mirza Adityaswara sees that Indonesia may gain benefit from US recession, caused it can be a way to press current account deficit (CAD). Indonesia targets to decrease the CAD to 2.5 percent of Gross Domestic Product in this year.
Amid market fear over recession, US’ CAD increased more than expected. During 2018, US current account deficit increased by 8.8 percent to US$488.5 billion, the highest point in 10 years. It is equal to 2.4 percent of Gross Domestic Product (GDP), the biggest since 2012.
While in the fourth quarter of 2018, US’ CAD rose by 6.1 percent to $134.4 billion. The current account deficit represented 2.6 percent of GDP, higher by 0.1 percent compared to the third quarter.
Furthermore, to tackle the challenges in 2019, BI will take five new policies and four strategies. The policies are continue to take preemptive monetary policy and ahead of the curve, continue the direction of accommodative macro-prudential policy, accelerate financial market deepening in order to maintain stability in the money market and support wider economic financing.
Then, continue the role of payment system policies in supporting economic activities, also support Islamic economic and financial development at the regional level as a source of new economic growth.
On the strategies, BI said is going to improve the competitiveness of the national economy, develop the capacity and capability of the industrial sector, optimize the use of the digital economy, and expand economic funding sources.
Finance Minister Sri Mulyani Indrawati said that there is an improvement of fiscal management quality. According to her, Indonesia central government assets rose by 4.48 percent to Rp6,214.2 trillion ($440.72 billion) in 2018.
Amid all of the sentiments, Rupiah against US dollar depreciated by 0.21 percent to 14,350. While, the Jakarta Composite Index also decreased by 0.39 percent to 6,444.73 with Rp474.72 billion foreign outflows.
May you have a profitable day!
Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia