Bank Indonesia continued to maintain BI 7-Days Reverse Repo Rate (BI 7-DRRR) benchmark rate at 3.50%. Economic pressure may happen again in 3Q21, thus NHKSI Research also saw the need for low interest rate to support domestic recovery.
Survey results from The Economist, Nikkei Asia, and Bloomberg show that Indonesia is in the category of relatively slow economic recovery.
Indonesia Statistics (BPS) recorded the Consumer Price Index (CPI) for July 2021 to experience an inflation of 0.08% MoM. This figure increased from the previous month, which booked 0.16% MoM deflation.
Amidst ongoing economy recovery in the US, the Federal Reserve holds Fed Fund Rate (FFR) at around 0%-0.25%.
Bank Indonesia (BI) maintains the BI Seven Day Reserve Repo Rate (BI 7-DRRR) interest rate at 3.50% in July 2020. Inflation realisation and outlook are still low at around 1.8% and 2.2% in 2021. NHKSI sees other factors considered by BI were: China and the US economic recovery, the potential increase in global inflation as the economy grows, high rupiah volatility, and domestic economic pressure due to the increasing daily average number of Covid-19 cases. We also see that BI do not need to be concern about the increase in global interest rates, especially as the Fed will not start its tapering program this year.
Last week, Statistics Indonesia (BPS) recorded June’s trade balance surplus at USD 1.32 billion. This is lower than the previous month which booked a surplus of USD 2.7 billion. However, it is still higher than the trade balance in June 2020 which posted a surplus of USD 1.2 billion. Meanwhile, throughout 1H21, Indonesia’s trade balance surplus accumulated to USD 11.86 billion. The surplus was due to export value which reached USD 18.55 billion in June 2021, with a lower import value. The import value in June was recorded at USD 17.23 billion. Furthermore, Indonesia has experienced a surplus for 14 months in a row.
Statistics Indonesia (BPS) recorded the Consumer Price Index (CPI) for the June 2021 period to experience deflation of 0.16% MoM. Meanwhile, on a yearly and annual basis, inflation was 0.74% YtD and 1.33% YoY respectively.
Indonesia’s retail sales performance increased in April 2021, reflected in the Real Sales Index (RSI) from Bank Indonesia which was recorded at 220.4.
IHS Markit released the data on the Indonesian Manufacturing Purchasing Managers’ Index (PMI) for the May 2021 period, at 55.3 or the highest level in history of the survey.
