Mix Monetary Policy From Global Central Banks - Photo by the Committee
JAKARTA (TheInsiderStories) — Good morning! Ahead of this week, Indonesia, Thailand, and Philippines will decide the interest rates amid cautious of the Federal Reserves (Fed) rate increase by the end of the year.
According to analysts, Indonesia central bank is predicted to hold its Seven-Day Reverse Repurchase Rate (BI 7-DRR) rate at 5.75 percent. While Bank of Thailand is expected to increase its rate by 25 basis points (bps) to 1.75 percent, and there are mixed views over Philippines’ central bank’s move to increase or hold its interest rate at 4.5 percent.
While, Japan, Hong Kong, and Malaysia will announce its third quarter GDP. Japan’s economy is probably dwindling after typhoons and earthquake disruption that forced some factories and major airports temporarily closed down. But Hong Kong and Malaysia GDPs are estimated to grow.
Furthermore China will update its industrial production that will be signaling if there’s any impact of the ongoing trade war with United States (US). Then, US will release it October’s inflation and retail sales data this week. Rising inflation would cause Fed rate increase, and retail sales  relate to consumer spending that accounts around 70 percent in US economic growth.
During last week, Rupiah kept gaining power eventhough there is no good sentiment over Indonesia macroeconomic data release. And this week, the local currency is estimated to continue its strength towards BI board of governor meeting on BI 7-DRR, on Nov. 14 to 15, and after the announcement.
The Jakarta Composite Index along with all sectors, slumped after blooming days in green territory. It fell 1.71 percent Friday, to 5,874.15, with low foreign net sell at Rp42.93 billion (US$29.20 million). US midterm election has shaken Asian stocks market, due to investors fear over Democrats winning in parliament. President Donald Trump may not be easy to run his fiscal policy amid opposition position as lawmaker.
Other economic data has released last week. Indonesia Current Account Deficit (CAD) in third quarter swelled to $8.8 billion or 3.37 percent of gross domestic product (GDP), higher than the previous quarter’s deficit of US$8 billion, or equal with 3.02 percent of GDP. This CAD increase was affected by the decline of goods trade balance and higher service balance deficit.
With insufficient capital and financial account surplus to finance CAD, Indonesia Balance of Payment recorded at $4.4 billion deficit.
Then, foreign exchange reserves by the end of September 2018 was $114.8 billion, or equivalent to finance 6.3 months of imports and government foreign debt, still considered above international adequacy standard of 3 months of imports.
Meanwhile, Lion Air JT-610 PK-LQP Voice Cockpit Recorder (VCR) search operation continues after almost 2 weeks. Authority considered Flight Data Recorder finding only consists of 80 percent data. So VCR is important to get comprehensive data for investigation. The Search and Rescue Agency has stopped operation for Lion Air JT-610 PK-LQP victims’ bodies.
May you have a profitable week!
US$1: Rp14,700
Written by Linda Silaen and TIS Intelligence Team, Please visit our new website to get more insight on Indonesia’s economy: www.tisintel.com