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BI Board of Governor's Meeting, January 2019

Author

Listed:
  • Febrio Kacaribu

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Syahda Sabrina

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Nauli A. Desdiani

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Nisrina Qurratu’Ain

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

Abstract

Better than expected budget deficit in 2018, amidst the widening current account deficit, has positively affected the market sentiment and helped Rupiah to appreciate to around 14,000 level. Rupiah is now among the strongest emerging market currencies since October 2018 as portfolio investments are coming back, despite the Fed rate hike last month. The Fed’s dovish policy stance and US-Tiongkok trade war potential truce have helped the global investors to start looking at the emerging economies’ assets again. Inflation, on the other hand, is still subdued, signaling slow and steady consumption, partly due to higher interest rate in 2018. Considering the stable domestic fundamentals, the implementation of negative Tobin Tax, and the diminishing external risks, we are of the opinion that Bank of Indonesia should hold its policy rate this month.

Suggested Citation

  • Febrio Kacaribu & Syahda Sabrina & Nauli A. Desdiani & Nisrina Qurratu’Ain, 2019. "BI Board of Governor's Meeting, January 2019," LPEM FEBUI BI Board of Governor Meeting Brief 201901, LPEM, Faculty of Economics and Business, University of Indonesia, revised Jan 2019.
    • Handle: RePEc:lpe:gomeet:201901
    as

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    File URL: https://lpem.org/repec/lpe/queouts/BBG201901.pdf
    File Function: First version, 2019
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