Home TIS Intelligence Morning Briefing: Indonesia Oversees the Inflation Target

Morning Briefing: Indonesia Oversees the Inflation Target

To keep inflation remaining within the target range of 3.0±1 percent, the government and Bank Indonesia agreed to maintaining volatile food inflation in the range of 4.0±1 percent - Photo by BI Office

JAKARTA (TheInsiderStories) – Good Morning! To keep inflation remaining within the target range of 3.0±1 percent, the government and Bank Indonesia (BI) agreed to maintaining volatile food inflation in the range of 4.0±1 percent. To reached the target, the parties agreed to strengthening price affordability, supply availability, smooth distribution, and effective communication, especially ahead of the national religious holidays.

Both also aimed to strengthening agricultural institutions, accompanied by capacity building, financing and development of digital agricultural ecosystems, including synchronizing programs and data. Then, support the management of public expectations and strengthening the coordination of the central and regional governments in controlling inflation through the holding of the National Coordination Meeting for Inflation Control in June 2020.

BI also announced, the residential property prices grew limited in fourth quarter (4Q) of 2019 and are predicted to continue in 1Q of 2020. In the same period, the Residential Property Price Index grew 0.30 percent (QoQ), lower than 0.50 percent in the previous quarter. In the 1Q of 2020, the index growth is predicted to increase limited to 0.43 percent (QoQ).

In the midst of limited price increases, residential property sales in 4Q of 2019 fell 16.33 percent (QoQ), after the previous quarter grew 16.18 percent. The decline in home sales occurred in all types of houses. While, the majority of respondents (71.88 percent) made purchases of houses using financing sources from the banking loan facilities.

The revision of Law Number 4 of 2009 concerning Mineral and Coal Mining is targeted to become law in the next six months. This regulation will be the legal basis for the contract extension of the Coal Mining Work Agreement and provide legal certainty for the contract to be completed in November.

On Thursday, the ministry of trade has issued 62,000 tons of garlic import from China and India. Earlier, the ministry of agriculture has sent the Garlic Horticultural Product Import Recommendation for 103,000 tons to the trade ministry. With the import permits, its expected that prices on the market will stabilize.

Through Trans Airways, tycoon Chairul Tanjung bought up 47.9 million shares of PT Garuda Indonesia Tbk (IDX: GIAA). With the addition of this stock, CT Corpora’s business unit ownership in the state-owned company increased 0.18 percent to around 25.80 percent.

In today’ trading, Indonesian Rupiah closed down 0.15 percent to 13,694 and the middle rate of BI corrected to 13,679 per US Dollar. The Jakarta Composite Index (JCI) closed down 0.70 percent to the level of 5,871.954 compared to prior day.

The analysts rated, the weakening of two major instruments still dominated by external factors, especially fears on the coronavirus threat. In the latest report of the Chinese Government, the number of fatalities reached 242 people a day in Hubei Province.

As of today, the number of people who died from the coronavirus infection in Hubei Province is 1,310. Hubei also recorded a staggering amount of new cases, with 14,840 people tested positive for the COVID-19 after authorities started using a new clinical method to diagnose people.  

Another external factor is an optimistic statement from the Federal Reserve (Fed) chair, Jerome Powell, on the US economy and make American Dollar stronger than any global currencies. Another factor that will suppress the Rupiah and JCI is the solid US economic data.

Tonight, the country will release inflation data. If the inflation rises, the Fed increasingly has no reason to cut interest rates. The market expects US inflation to rise to 2.5 percent from the previous at 2.3 percent.

The observers rated the local currency would move in the range of 13,620 to 13,745 against the Greenback. While, the stock index between 5,750 – 5,940.

Stocks to be watch for today are PT London Sumatera Plantation (IDX: LSIP), PT PP Tbk (IDX: PTPP), PT Adhi Karya Tbk (IDX: ADHI), PT HM Sampoerna Tbk (IDX: HMSP), PT Telkom Indonesia Tbk (IDX: TLKM), PT Bank Central Asia Tbk (IDX: BBCA), PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Unilever Indonesia Tbk (IDX: UNVR), PT Gudang Garam Tbk (IDX: GGRM), and PT Jasa Marga Tbk (IDX: JSMR).

May you have a profitable day!

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia