Desember 2016 2nd week

16 december 2016

Categories : IR Weekly Review


  • MACRO
    • The Federal Reserve on Wednesday (14/12) raised its benchmark rate by 25 basis points, as expected. The reasons is for boosting the economy over next month before the elected President Donald Trump officially in the White House. Federal Open Market Committee (FOMC) agreed to raise the federal funds rate in the range of 0.5 to 0.75 percent. But they need a "stage" to improve. The rise in interest rates from the previous range of 0.25-0.5 per cent is the first increase since December 2015 and second time during the last decade. Analysts will look carefully the Fed leader, Janet Yellen following this announcement, how fast the pace of interest rate hikes in the next year. Many analysts expect that central bank will raise interest rates as soon as possible if Trump promised infrastructure expenditure and fuel tax cuts faster inflation.

    • UK inflation to the level of 1.2% recorded in November, an increase of 0.9% compared to October boosted by the price of clothing to be the largest in six years. The rate of Consumer Price Index (CPI) in November also be the highest since October 2014, at the level of 1.3% (13/12/2016). Office for National Statistics (ONS) said the rising price of fuel oil also be a driving force, though not too big. The increase was inline by a decrease in air ticket fares. "November is a bit of a rally, when the poundsterling began to improve to ease pressure on inflation and raw materials import business. But consumer prices continued to rise, mainly because of the price of clothes and fuel," said ONS Inflation Chief Mike Prestwood.

    • Review:

      The impact of the Fed's interest rate hikes on other countries, is in the flow of foreign capital would out of developing countries, including Indonesia. The second, there would be pressure on the currencies of developing countries in Asia, including Rupiah.

  • MICRO
    • Bank Indonesia (BI) estimates that economic growth in the fourth quarter 2016 will be in the range of 4.9 percent. The prognosis is better than the previous 4.8 percent, but lower than the same period last year, 5.04 percent. "In our previous estimation of expected economic growth in the fourth quarter is around 4.8 per cent but now growth in the fourth quarter, according to BI estimation already close to 5 per cent, the number is more than 4.9 per cent," said Senior Deputy Governor of BI Mirza Adityawasra in Hotels Indonesia Kempinski Jakarta, Friday (16/12). With the realization of economic growth in the first quarter, II, and III respectively by 4.91 percent, 5.18 percent and 5.02 percent so the economic growth this year is expected by BI in the range of 5 percent. That number is according to government estimation mentioned by the Minister of Finance Sri Mulyani Indrawati.

    • Deposit Insurance Corporation (LPS) keep the interest rate guarantee deposits in rupiah and foreign exchange (forex) in commercial banks, as well as for deposits denominated in rupiah rural banks (BPR). Guarantee rate for the period from 15 September 2016 until January 15, 2017, it isn’t change with 6.25 per cent for rupiah savings. While foreign currency deposits have a guaranteed interest rate of 0.75 percent. Meanwhile, the rupiah deposits in rural banks has been set at 8.75 percent. LPS Secretary, Samsu Adi Nugroho said the guaranteed interest rate is still in line with the latest developments in interest rates on bank deposits. LPS looked at the macro economic conditions in the country remains quite stable with adequate liquidity.

    • Review:                                                                                                                                     

      All policies issued by Indonesian financial institutions should pay attention to external factors, after the election of the President as well as the response of monetary policy in the United States, needs to be examined because of the potential to increase volatility in global financial markets, especially emerging markets, which may impact on the economy and domestic financial stability.

  • BANKING
    • PT Bank Rakyat Indonesia Tbk (BRI) was in the first rank position as the tax amnesty program repatriation collector grant recipients belong to the taxpayer (WP) until this mid-December. BRI reported repatriation of funds to accommodate as much as IDR 11 trillion until December 16th, 2016. "Repatriation funds of IDR 11 trillion until Friday. December’s not over yet, we'll wait until December 31st," said Finance Director of BRI Haru Koesmahargyo, Sunday (18/12). Haru noted, treasure of Indonesian citizens who had returned home through the repatriation program, mostly from Singapore and the United States. He believes, repatriation of funds into the country will still be increased in accordance with the commitment of the participating WP tax amnesty program. He put the number as a whole will be translucent to IDR 143 trillion.

    • Bank Mandiri, BNI, PT Trans Earth Serbaraja, and PT SMI today signed a loan agreement with type of syndicate loan of Serpong-Balaraja toll road project. Trans Earth Serbaraja is a consortium of business groups Sinar Mas Land, Astratel Nusantara (Astra Infrastructure) and Kompas Gramedia. The actual construction has already begun with the construction work at the STA 02 + 900 until 04 + 100 on December 15th, 2016. Vice President Director of Bank Mandiri Sulaiman Arif Arianto said the company has a strong commitment in supporting strategic infrastructure projects, such as toll roads because the presence will improve business efficiency and created a new economic center. "Toll road project is one focus of Bank Mandiri in lending infrastructure, which is per October 2016 the company's financing commitment to highway projects reached IDR 15.4 trillion, or about 15% of total credit commitments company's infrastructure," he said. BNI President Director Anggoro Eko Cahyo said that the syndicate loan agreement has a deep meaning for a joint effort in realizing the acceleration of infrastructure development.

    • Review

      Implementation of syndicate loans if Banks are not careful and cautious may cause a risk, for syndicate loans that disburse large amounts of funds can causes bad loans. The majority reason is due to the over-run, which means the estimated cost of the project by the debtor is lower than reality on the ground so that the implementation of the project failed. The subsequent impacts, bad loans can also lead to the emergence of legal issues such as corruption due to losses.

Disclaimer : This document is for informational purposes only and obtained from a variety of reliable sources, but is not a guarantee the accuracy or completeness and should not be relied on completely. The above conditions may be changed at any time. Forbidden to rewrite anything without written permission from The East Java Regional Development Bank