In its meeting held on 14–16 February, Bank Indonesia’s Board of Governors held unchanged the 7-day reverse repurchase rate at 4.75%. It also decided to keep steady the deposit facility rate (4.00%) and the lending facility rate (5.50%). At their current levels, the rates were deemed consistent with maintaining macroeconomic and financial system stability.

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20170220.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 13 - 17 February 2017

Japan’s real gross domestic product (GDP) growth eased to 0.2% quarter-on-quarter (q-o-q) in the fourth quarter (Q4) of 2016 from 0.3% q-o-q in the third quarter (Q3) of 2016. On an annualized basis, Japan’s economy expanded 1.0% in Q4 2016, down from the 1.4% growth posted in the previous quarter. Malaysia’s GDP expanded 4.5% year-on-year (y-o-y) in Q4 2016, faster than growth of 4.3% y-o-y in Q3 2016 but the same as in Q4 2015. On a quarterly and seasonally adjusted basis, Malaysia’s GDP grew 1.4% in Q4 2016. In 2016, Malaysia’s economy expanded 4.2% y-o-y and was valued at MYR1.23 trillion in current prices. Singapore’s economy grew 2.9% y-o-y in Q4 2016, an upward revision from the advance estimates released in January, and higher than the 1.2% y-o-y expansion posted in Q3 2016. On a q-o-q and seasonally adjusted annualized basis, Singapore’s GDP grew 12.3% in Q4 2016 following a contraction of 0.4% in Q3 2016.

*     In its meeting held on 14–16 February, Bank Indonesia’s Board of Governors held unchanged the 7-day reverse repurchase rate at 4.75%. It also decided to keep steady the deposit facility rate (4.00%) and the lending facility rate (5.50%). At their current levels, the rates were deemed consistent with maintaining macroeconomic and financial system stability.

*     Consumer prices in the People’s Republic of China (PRC) rose 2.5% y-o-y in January, up from 2.1% y-o-y in December. On a month-on-month basis, consumer prices in the PRC rose 1.0%, with food prices rising 2.3% and non-food prices rising 0.7%. The PRC’s producer prices rose 6.9% y-o-y in January, up from 5.5% y-o-y in December. On a month-on-month basis, producer price inflation slowed to 0.8% in January from 1.6% y-o-y in December.

*     Exports from Indonesia climbed 27.7% y-o-y to USD13.4 billion, with oil and gas exports and non-oil exports posting positive growth. Imports also rose 14.5% y-o-y to USD12.0 billion. As a result, a larger trade surplus was recorded in January at USD1.4 billion.  Malaysia recorded a current account surplus of MYR12.2 billion in Q4 2016, up from MYR6.0 billion in the preceding quarter and MYR10.5 billion in Q4 2015. Singapore’s non-oil domestic exports rose 8.6% y-o-y in January, following a 9.1% y-o-y increase in December. Exports of electronic products and non-electronic products rose 6.1% y-o-y and 9.9% y-o-y, respectively.

*     Overseas Filipinos’ personal remittances rose 3.6% y-o-y in December to a record high of USD2.8 billion. Full-year 2016 personal remittances reached USD29.7 billion.

*     The Hong Kong Exchanges and Clearing Limited announced last week that it would launch currency options for the renminbi on March 20. 

*     Last week, the Hong Kong, China branch of the Bank of China issued 3-year floating rate bonds. The bonds have an issue size of USD1.2 billion and a coupon rate that is 77 basis points over the 3-month London Interbank Offer Rate.

*     Yields fell for most tenors in the PRC as the central banks helped add additional liquidity in money markets and in Singapore, due to lower export growth and in Thailand.  Yields rose for most tenors in the remaining markets.  The 2-year versus 10-year yield spread rose in Indonesia, the Republic of Korea, and Singapore and remained unchanged in Thailand.  The yield spread fell in the remaining markets.

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