Indonesia's President Joko Widodo and Philippines's President Rodrigo Roa Duterte talk cassually at the sidelines ASEAN Leaders Summit in Singapore - Photo by President Office
JAKARTA (TheInsiderStories) — In front of global leaders in ASEAN plus three summit, Indonesia President Joko Widodo asked to minimize dependency only on one currency to tackle global uncertainty and protectionism.
He also urged the leaders to implementing currency swap and using domestic currency in the cross-country trade transaction payment around the region. Furthermore, he said, the multilateral currency swap agreement, Chiang Mai Initiative must be strengthened. Thus, he highlighted the importance of cooperation between ASEAN, China, Japan, and South Korea.
Indonesia economy didn’t demonstrate attractive result lately. Statistics Agency reported that in October, Indonesia trade balance deficit at US$1.82 billion, caused by $15.80 billion export and $17.62 billion import. Crude oil, also oil and gas products contributed the import increase. Oil and gas trade deficit even hit record since 2014, at $10.74 billion.
Miles away from Indonesia, United States retail sales in October spiked most in the last 5 months, contributed by automobiles, fuel, and building material, following damages caused by hurricane florance. US retail sales recorded rose by 0.8 percent, bounced back after fell by 0.1 percent in the previous month.
Meanwhile, the Government debt swelled 15 percent to Rp4,478.57 trillion ($304.66 billion) in October 2018, compared to the same period last year. The 7.5 percent foreign debt consist of Rp833.92 trillion loan and bond Rp3,644.65 trillion. But Finance Minister Sri Mulyani Indrawati considered debt ratio to GDP is in safe limit at 30.68 percent.
Yesterday, Rupiah closed with minimum wane to 14,764 versus US dollar, even though Bank of Indonesia (BI) just decided to increase its 7-Day Reverse Repurchase Rate (BI 7-DRR rate) by 25 basis points (bps) to 6 percent. This is the sixth increase with 175 basis points total, in 2018.
Followed the BI 7-DRR rate hike, deposit and lending facility rate increased by 25 bps respectively to 5.25 percent and 6.75 percent.
The reference rate jump aims to reduce Current Account Deficit (CAD).
As in September, Indonesia had $8.8 billion deficit, or equal to 3.37 percent Gross Domestic Product. Besides, BI 7-DRR rate increase is also targeted to strengthen domestic financial assets attractiveness by anticipating global reference rate in the next few months.
These lousy sentiments didn’t impact much to stocks market, as Jakarta Composite Index continued its growth by 1.66 percent to 5,955.73. Foreign net buy returned with 1,370.26 trillion Rupiah worth.
May you have a profitable day!
US$1: Rp 14,700
Written by Linda Silaen and TIS Intelligence Team, Please visit our new website to get more insight on Indonesia’s economy: