|
Economic
Research
|
4 October 2016
|
|
Indonesia
|
|
|
Economic
Highlights
|
|
|
Indonesia’s
money supply (M2) growth edged down to 7.7% y-o-y in August, from
+8.2% in July and +8.7% in June. This was due to a slowdown in net domestic
operation, on account of slower loan growth but partly mitigated by a pick-up
in net foreign operation.
Loans
growth slackened, on account of slower growth in loans extended for working
capital and investment. Deposit growth, likewise, moderated in August, due to
slower increases in demand and time deposit. Going forward, we expect
demand for private credit to pick up, aided by easing monetary policy and
a rebound in economic growth that could induce more household spending and
borrowing.
Bank
Indonesia (BI) board of governors’ meeting decided to cut the BI 7-Day (Reverse) Repo rate to 5.0% on 22
September 2016. For the rest of the
year, we expect the BI to retain its policy rate unchanged at the current
level. Further out, we expect the BI to
slash its key policy rate by another 50 basis points in 2017 to support economic growth.
Meanwhile,
Indonesian rupiah (IDR) appreciated of late, partly due to unchanged Fed rate
in September and the introduction of amnesty tax. The IDR, however, is still
susceptible to global financial markets even though the selling pressure will
unlikely be as severe as last year. As a whole, we expect the IDR to trade
toward IDR13,100 in 2016 before weakening to 13,400 by end-2017.
Economist: Rizki Fajar| +6221 2970 7065
|
|
|
|
|
|
To
access our recent reports please click on the links below:
23 Sep: BI
Cuts The Key Rate to 5.00%
|
|
Wednesday, October 5, 2016
Money Supply and Loan Growth Decelerate in August
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.