Morning Briefing: The Fed Fund Rate Releases Today

G20 Finance Ministers and Central Bank Governors Meeting - Photo by G20

JAKARTA (TheInsiderStories) – Good Morning! On Wednesday night, United States (US) Federal Open Meeting Committee (FOMC) met to decide the monetary stance for this month. At the same time, Bank Indonesia (BI) will start the two days meeting before make a decision on Thursday.

Last month, the Federal Reserves (Fed) has cut its benchmark rate (FFR) by a quarter-point to 2 percent and 2.25 percent, the first rate cut in a decade. At the same month, BI also slice its benchmark rate for second time by 25 bps to 5.5 percent. Deposit facility  and lending facility rates also dropped by 25 bps to 4.75 percent and 6.25 percent, respectively.

Today, the Fed Bank of New York will conduct an overnight repurchase agreement (repo) operation from 8:15 AM ET to 8:30 AM ET tomorrow in order to help maintain the FFR within the target range of 2 to 2-1/4 percent. This repo operation will be conducted with Primary Dealers for up to an aggregate amount of US$75 billion.

Securities eligible as collateral in the repo include treasury, agency debt and mortgage-backed securities. There will be a limit of $10 billion per proposition submitted in this operation, subject to a minimum bid rate of 2.10 percent.

In Asia, Iran’ supreme leader Ayatollah Ali Khamenei stated that “there will be no talks with the US at any level” later this month. He said the Washington wants to prove its “maximum pressure policy” against Iran is successful.

Despite attacks on its oil facilities, Saudi Aramco has informed at least six refiners owned by the producer will supply full allocated volumes of crude oil for October. Saudi Arabia has said it would be able to meet oil customers’ demand from its ample storage.

The Iran-aligned Houthi group that controls Yemen’ capital claimed responsibility for Saturday’ attack, which knocked out more than half of Aramco’ oil production and damaged the world’ biggest crude processing plant.

In Indonesia, there had been reports about a possible meeting A total of Rp1.1 trillion ($78.75 million) $has been earmarked to handle adverse impacts of ongoing land and forest fires in Kalimantan and Sumatra Island. Last year, the government has disbursed Rp2.4 trillion to handle the haze problems.

Yesterday, minister of industry, Airlangga Hartarto has proposed to the finance ministry to exempt the value added tax for cocoa beans to zero percent as an effort to meet the needs of raw materials for the processing industry in the country and boost export. Other ways, he said, is bilateral trade cooperation with a number of potential countries, such as Ghana.

On Tuesday, Indonesian Rupiah weakened 0.41 percent to 14,100 against the US dollar. While, the Jakarta Composite Index (JCI) gained 0.28 percent to the level of 6,236.7 compared to prior day.

Today, the local currency still in the red zone and will move in the range 14,050 – Rp 14,195. And, the composite index between 6,200 –6,315.

On Wednesday, analysts recommended PT Hotel Mandarine Regency Tbk (IDX: HOME), PT Steel Pipe Industry of Indonesia Tbk (IDX: ISSP), PT Bank Rakyat Indonesia Tbk (IDX: BBRI) dan PT Telekomunikasi Indonesia Tbk (IDX: TLKM), PT Perusahaan Gas Negara Tbk (IDX: PGAS), PT Media Nusantara Citra Tbk (IDX: MNCN), PT Kalbe Farma Tbk (IDX: KBLF), PT Merdeka Cooper Gold Tbk (IDX: MDKA), and PT Puradelta Lestari Tbk (IDX: DMAS) stock to be watch.

May you have a profitable day!

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