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Kapital News Highlight - Nov 16

Friday, November 16, 2018

• President Joko Widodo (Jokowi) held a bilateral meeting with US Vice President Mike Pence to discuss a number of collaborations including in the trade sector. According to the Foreign Minister of Indonesia Retno Marsudi, President Jokowi emphasized that Indonesia and the US could complement each other in the trade sector. Therefore, the trade relations between the two countries would be mutually beneficial. Jokowi also hoped that the US would provide a Generalized System of Preferences (GSP) system for Indonesia as it is beneficial for both parties. Marsudi also remarked that Indonesia needs the US support for the AHA Center (ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management), so that Indonesia could carry out tasks given by ASEAN leaders to play role in the Rakhine State. (Antara News)

• Managing Director of the International Monetary Fund (IMF) Christine Lagarde said central banks throughout the world should consider issuing digital currencies. In her speech at the Singapore Fintech Festival on Wednesday (14/11), Lagarde highlighted the changing nature of money, because physical cash demand declined throughout the world. She said the central bank had the role of supplying money towards the digital economy. In her opinion, digital currencies supported by the central bank could help the financial inclusion while increasing security and privacy in alternative payment ecosystems. Moreover, digital currencies are cheaper and more efficient than the paper ones. (Kompas)


• According to Statistics Indonesia (BPS), Indonesia has posted another monthly deficit in October after enjoying a surplus of US$230 million in the previous month. The deficit in October was US$1,82 billion which made it the second highest after a high deficit in July. Head of BPS Suhariyanto said that the global price fluctuations in several commodities had affected the trade balance, where the prices of copper, zinc, silver, and gold increased, and prices of palm kernel oil, crude palm oil (CPO) and coal declined. Overall, exports grew from 5,87 percent month-to-month (mtm) to 15,8 percent in October. Meanwhile, overall imports with a total amount of $17,62 billion up by 20,6 percent mtm. This resulted Indonesia's year-to-date trade deficit in 2018 has amounted to $5,51 billion, with surpluses seen in March, June, and September. (The Jakarta Post)


• President Director of PT Semen Indonesia (SI) Hendi Prio Santoso said that the company would be able to produce 53 million tons of cement following the company's acquisition of PT Holcim Indonesia. He added that Semen Indonesia alone controlled 40 percent of the cement market in Indonesia, while Holcim controlled 15 percent of the market. This made them control 55 percent of the domestic market. A few days ago, SI announced that it had taken over 6,18 billion shares of Holcim in which the 80,6 percent of the company's shares in a US$916 million transaction. SI corporate secretary Agung Wiharto estimated that supply and demand would balance out in 2027. (The Jakarta Post)


• Bank Indonesia (BI) through the Monthly Governor Board Meeting (BI) decided to raise the 7-Day Reverse Repo Rate (BI7DRRR) benchmark interest rate by 25 basis points (bps) to 6 percent. If accumulated, BI has raised interest rates six times by 175 bps until November 2018. BI Governor Perry Warjiyo said that the decision was to address global conditions, one of which was the current account deficit (CAD). The deposit facility interest rate also rose 25 bps to 5.25 percent and lending facility 6.75 percent. Perry said that the decision was consistent with the efforts to reduce the current account deficit (CAD) to the safe limit. (Kompas)


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