In the trade war, US has imposed tariffs on US$250 billion Chinese goods. While China retaliated, imposing tariffs on $113 billion of US goods. The ceasefire between US and China trade is predicted to blow good sentiment over world’s financial market.
During last week, the Rupiah has strengthened by 1.45 percent. Bank of Indonesia (BI) claimed that government has taken stronger policies to maintain economic stability. But BI realised that the Rupiah is still undervalue compared to its fundamental.
Meanwhile, the Jakarta Composite Index last week has been consolidating. It peaked at 6,107.16 on Thursday (11/29), but was then hit by profit-taking on Friday to 6,056.12. Foreign investors also recorded net sell at Rp1.4 trillion ($96.55 million), making Rp45.58 trillion accumulated net sell since early 2018. Even so, Indonesia stocks market’s loss is better compared to other ASEAN countries.
Furthermore, Statistic Indonesia will announces the country inflation data today. Its projected to be maintained at around 3.2 percent at the end of this year. A survey held by the central bank mentioned that November’s monthly inflation will be 0.18 percent. Accumulated in year-to-date, the inflation is estimated at around 2.41 percent. According to Bank Indonesia (BI), the manageable inflation shows that people’s purchasing power is under-control.
While, Asia Development Bank (ADB) predicted Indonesia’s inflation at 3.26 percent in 2018. Based on ADB calculation, Indonesia’s November monthly inflation is at 0.3 percent, higher than BI’s calculation.
Factors affected the inflation are pressure on imported inflation from Rupiah weakening and food price increase over decreasing production due to rainy season.