Indonesian Bank to Maintain Benchmark Rate at 6% and Implements Mix-Policy
Board of governor Bank Indonesia (BI) decided cut its 7-Day Reverse Repo Rate (BI-7DRR) 25 basis points (bps) to 4.25 percent, Deposit Facility rate to 3.50 percent, and Lending Facility rate to 5.0 percent, said the governor today (05/18) - Photo: Privacy

JAKARTA (TheInsiderStories) — Good morning! The Rupiah and Jakarta Composite Index (JCI) have both taken another hit. This is in part due to the United States’ Federal Reserves and Bank Indonesia’ (BI) monetary action.

Yesterday, Federal Open Market Committee (FOMC) increasing its rate by 25 points to 2.25-2.5 percent. While, BI decided to kept the 7-Day Reverse Repurchase Rate (BI 7-DRR) rate at 6 percent

The Rupiah plummeted by 0.82 percent to 14,499 against US dollar. Then, JCI fell by 0.45 percent, down to 6,147.87 with Rp450.66 billion (US$31.08 million) net sell. The finance sector had the second deepest degradation after basic industry and chemicals.

The decision to keep the key rate unchanged is considered enough, as it was anticipated earlier, by increasing the rate in November. Moreover, BI is optimistic that next year’s economy will be better than this year’s .

Especially, the Fed will not be as aggressive as this year. US’ central bank rate has been increased four times this year and expected for only two more hikes next year.

Perry Warjiyo, the BI’ Governor, said that authorities try to maintain the attractiveness of domestic financial markets and reduce the current account deficit (CAD). Seeing the high trade balance deficit in November, the Bank predict that the CAD will be worse than expected, up to 3 percent of Gross Domestic Product (GDP). But he stressed that it is not an alarming condition.

Then, Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) will not be agreed upon this year, due to foreign political policy. Without mentioning the issue, Trade Minister Enggartiasto Lukita said that the discussion domain is now between each Foreign Minister.

The agreement hang up is allegedly because of Australia’s plan to move its embassy to Jerusalem, which can increase tension in the region. While Indonesia’s stance supports the two-state solution for the Palestine and Israel dispute.

Moreover, AirAsia’ official Yulia Sintawati received Rp20 million from AirAsia ground staff to slip off suspect Lippo Group official Eddy Sindoro from a Soekarno-Hatta Airport immigration check.

Sindoro, who was arriving from Kuala Lumpur, Malaysia, on August 28, successfully got out of the airport in disguise. He suspected of bribing former Registrar of Central Jakarta District Court, Edy Nasution, in an effort to submit a judicial review.

Meanwhile, the Malaysian High Court reinstated a decision by the Malaysia Competition Commission imposing (MyCC) a RM10 million fine on Malaysia Airlines  (MAS) and AirAsia Bhd for violating market-sharing prohibition. The decision followed MAS and AirAsia’ appeal, calling the accusation as an error of law and unreasonable.

MyCC has the authority to fine MAS and AirAsia 10 percent of their global revenue. But the fine was lower because both airlines were considered cooperative during the investigation. The RM10 million fine for each airline was based on AirAsia and MAS’ flights for several Kuala Lumpur routes, from January until April 2012 period.

Today moslem mass will demonstrate at the Chinese embassy as part of solidarity action for Uyghur moslem. Estimated number of 1,000 masses consisting of mass organizations 212 group, Front Pembela Islam, other Islamic mass organizations and other Islamic students will attendt the Action 212 Uyghur Moslem Solidarity.

Xinjiang authorities in northwest China has arrested have arrested a Uyghur senior court official for “two-faced” tendencies after he expressed concern over the mass incarceration of members of his ethnic group in recent years.

May you have a profitable day!

US$1: Rp14,500

Written by Linda Silaen and TIS Intelligence Team, Email: