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View all search resultsThe Indonesian government and Bank Indonesia (BI) have once again floated the possibility of redenominating the rupiah. The proposal aims to enhance economic efficiency, stabilize the currency's exchange rate, strengthen public confidence in the rupiah and maintain purchasing power. Critics, however, argue that the initiative risks diverting government resources from more substantive economic priorities. Still, Indonesia's current macroeconomic stability may provide a window for the policy as a corrective measure to past episodes of hyperinflation.
Bank Indonesia (BI) has kept its benchmark interest rate unchanged for a second month after recently decreasing it by 25 basis points (bps) in each of three consecutive meetings. The central bank has revised up its gross domestic product projection for the year.
Economic Economic experts are increasingly pessimistic about Indonesia's economic outlook during President Prabowo Subianto's first year in office, according to a recent survey of 64 economists from diverse institutional backgrounds. Although sentiment improved in the second semester compared to the first, expectations for economic growth remain subdued, while inflationary pressures and labor-market challenges persist.
Bank Indonesia's rate cut this week stunned markets for all the wrong reasons - investors fear the central bank is bowing to pressure from President Prabowo Subianto to juice the economy, compromising its independence and risking a rupiah sell-off.
An interplay of external and domestic factors has determined the rupiah's performance this year to date, and keeping an eye on established risks through approaches like monetary discipline and deepening regional cooperation will help safeguard currency stability toward improved economic resilience.
The Indonesia Stock Exchange (IDX) Composite index fell as much as 3.6 percent to 7,551 points at the open on Monday, as a week of political unrest in Jakarta rattled investor sentiment, before trimming losses to 7,612 within 10 minutes of trade.
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