All posts tagged: rupiah

Indonesia central bank, finance minister agree to boost asset yields to aid rupiah

Indonesia central bank, finance minister agree to boost asset yields to aid rupiah

Published by Sam Flores

JAKARTA, June 6 : Indonesia’s central bank chief and finance minister on Saturday agreed to increase yields on Indonesian assets to attract portfolio inflows and support the rupiah, after the currency hit record lows in the past few weeks. Bank Indonesia and the finance ministry “will increase the attractiveness of yields” on Indonesian assets “so that portfolio inflows return” to the country, Governor Perry Warjiyo told a press conference at parliament building. Warjiyo did not provide any details on the plan. He took questions but didn’t give any clearer answers. Southeast Asia’s largest economy has been hit by heavy capital outflows this year, with the stock market plunging more than 30 per cent and the rupiah sinking amid investor concerns over President Prabowo Subianto’s big spending plans, even as fuel subsidies balooned due to the Iran war. Foreign holdings of Indonesian bonds have slumped to a near two-decade low. Markets are also worried about the autonomy of the central bank, transparency issues at the stock market and Prabowo’s new plan to centralise exports of major …

Indonesia pledges central bank independence as rupiah hits record low

Indonesia pledges central bank independence as rupiah hits record low

Published by Sam Flores

BANK INDONESIA MEETING TO KEEP RATES UNCHANGED The focus will now switch to the central bank’s policy meeting on Wednesday, where analysts expect it to stand pat on rates. Indonesia’s deputy finance minister, Suahasil Nazara, will represent the ministry at the review, but will have no voting rights, Purbaya said. Trinh Nguyen, senior economist for emerging Asia at Natixis Corporate & Investment Banking, expects the rupiah to underperform against other Asian currencies in the short term as investors demand a higher risk premium for the economy. “Concerns preceded the appointment as investors question the lunch programme and the impact on Indonesia’s bright spot – which is low fiscal debt and hard rule on 3 per cent fiscal deficit on GDP,” she said, referring to Prabowo’s school meals programme. “Now with the appointment of his nephew, Bank Indonesia will be under pressure to ease monetary conditions,” Nguyen added. “But with the rupiah weak, we do not expect the central bank to cut.” BUDGET DEFICIT WOES Markets were stunned in September when Prabowo abruptly removed Indonesia’s influential …