Finance Minister Sri Mulyani Indrawati explained to media the result of Plenary Meeting at Bogor Palace (18/07) - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – Good morning. For the first time ever, the gross domestic products (GDP) of Indonesia reached Rp2,000 trillion (US$139.86 billion). Meanwhile Bank Indonesia will release their monetary stance today.

Based on the official data, for a recent years the country’s GDP move in the range of Rp1,700 trillion to Rp1,900 trillion. But next year, said Finance Minister Sri Mulyani Indrawati, Indonesia’s GDP will reach the highest ever in the decade.

Although the GDP rose, the minister judged, does not necessarily support Indonesia’s economic growth. Based on the current economic development, she said, the government plans to lowered the economic growth from this year’s target 5.4 percent to 5.3 percent.

On June 5, the government and lawmakers has approved the macroeconomic assumptions in the 2019’s State budget with a lower economic growth target of 5.2 per cent to 5.6 per cent. The 5.2 per cent to 5.6 per cent is similar to the Bank Indonesia’s forecast.

The government also has plan to revise Indonesian Crude Price (ICP) and the exchange rate assumption followed the current situation. The government set ICP benchmark US$70 a barrel and Rupiah could higher than proposal ceiling
in the range Rp13,700 to Rp14,000 per U.S dollar.
Indrawati stated, her ministry looking for the latest updates on the global economy development especially the trend of the chairman of the Federal Reserve Jerome Powell statement that saying to raise its benchmark interest rates based on the positive economic data of the United States.

Yesterday, Rupiah closed up 36 points or 0.25 percent at 14,414 per dollar. Meanwhile, West Texas Intermediate (WTI) oil price for August 2018 contract closed at $68.76 on the New York Mercantile Exchange. This figure recorded the biggest increase in more than a week.

At the same day, Brent oil for September delivery ended at $ 72.90 a barrel on the London-based ICE Futures Europe exchange. This global benchmark crude traded a premium of $5.15 against WTI for the same month.

BI-7DRR

Passingly, Indonesian central bank will announce the July’s BI seven-day Reverse Repo rate (BI-7DRR) position. Last June, BI raised its key interest rate by 50 basis points (bps) to 5.25 percent to stabilize rupiah

The Bank also raised its deposit facility rate by 50 basis points to 4.5 per cent, and its lending facility rate by 50 basis points to 5.75 per cent. This interest rate hike was the third in this year.

Some analysts sees board of governor BI will hold the benchmark rate amid the current economic development such as the Fed, trade war and domestic data. As we know the Fed is likely to raise its benchmark rates for twice or more in this year.

Email: linda.silaen@theinsiderstories.com

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