Bank Indonesia has intervened money market to prevent the weakening of Rupiah, said the official on Friday (06/12) - Photo: Pixabay

JAKARTA (TheInsiderStories) – Good Morning! Governor of Bank Indonesia (BI), Perry Warjiyo said, the central bank has succeed making Rupiah movements stable from 16,400 in April to around Rp14,000 a US Dollar these day through various monetary actions. The Bank also admitted was help the government to reduce the state bond from 8.08 percent to 7.2 percent by involved in the primary market.

Since April 21, BI has bought Rp26 trillion (US1.85 billion) of government bonds in the primary market. As known, the government needs funds over than Rp1,000 trillion to finance the 2020 State Budget deficit. On Tuesday, finance ministry has won Rp23.6 trillion in the state bond auction.

From Europe, Germany has approved a stimulus package worth EUR130 billion ($146.07 billion) aimed to encourages consumer spending and investment during COVID-19 outbreak. Along with reducing the value added tax, the largest economy in the region also allocated funds to build a 5G network, improve trains and double incentives for electric vehicles.

Continuing the stimulus in March, Chancellor Angela Merkel promised to spend any costs to encourage growth including a guarantee program for company liquidity. The country has provided more than EUR1.3 trillion, the highest in the European Union. Still, these efforts could not stop the growth of unemployment in May with the highest rate since 2015.

From United States (US), the Navy is preparing to test the sound and data link that will connect their latest aircraft carrier, the Gerald Ford to other warships in their fleet. While, security conditions in the country are increasingly fragile after police killings of African Americans George Floyd.

In Asia, the South China Sea heats up. The Philippines reversed its decision to terminate an important military agreement with the US because of increasingly territorial tensions with China in the South China Sea. The President, Rodrigo Duterte finally decided to maintain The Visiting Forces Agreement with American forces.

While, Taiwan is expected to assign an offshore patrol boat early next year to strengthen its territory in the disputed South China Sea. This region has become a hot spot amid increasing confrontation in the region between mainland China and US.

Next year, Taiwan will also begin production of advanced training aircraft after completing flight tests at the end of this month. From Europe, Russia claims to be worried over the military tensions between China and India on the Landakh border.

On Wednesday Indonesian Rupiah against the US dollar strengthened 2.22 percent to 14,095 and the Jakarta Composite Index gained 1.93 percent to 4,941.00 compared to the previous day. The analysts rated, local currency has a great chance of returning to below 14,000 a US Dollar, inline with the increase in the flow of foreign funds through debt instruments.

According to them, the exchange rate will strengthen to 13,700 versus the Greenback in the third quarter based on the strong fundamental and low coupon rate. Same happened in the stock market.

The reopening of the economy, especially in the US and other countries is believed to be reversing economic conditions that have been depressed due to the COVID-19 pandemic. However, the strengthening will be quite limited caused many uncertainties resulting from the new normal and fears of unrest in the America and rising US and Chinese tensions in the South China Sea.

Today, the JCI is projected to move between 4,872 to 5,029. Stocks that can be considered for today are PT Vale Indonesia Tbk (IDX: INCO), PT Tower Bersama Infrastructure (IDX: TBIG), PT Unilever Indonesia Tbk (IDX: UNVR), PT Bank Mandiri Tbk (IDX: BMRI), PT Bank Centra Asia Tbk (IDX: BBCA), and PT Bank Rakyat Indonesia Tbk (IDX: BBRI).

Then, PT Japfa Comfeed Indonesia Tbk (IDX: JPFA), PT Indofood Sukses Makmur Tbk (IDX: INDF), PT Jasa Marga Tbk (IDX: JSMR), PT Telkom Indonesia Tbk (IDX: TLKM)m PT Summarecon Agung Tbk (IDX: SMRA), and PT Pakuwon Jati Tbk (IDX: PWON).

US$1: Rp14,050, EUR0.89

May you have a profitable Day!

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