VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

FILE PHOTO: Bank Indonesia's logo is seen at Bank Indonesia headquarters in Jakarta, Indonesia, January 17, 2019. REUTERS/Willy Kurniawan/File photo - 

VOInews, BENGALURU : Bank Indonesia will cut its key interest rate next quarter and again in the fourth quarter, later than previously expected, as inflation rises and the rupiah weakens on renewed hawkishness from the U.S. Federal Reserve, a Reuters poll found. 

A major hurdle for the central bank, whose main mandate is currency stability, will be cutting rates too soon as the rupiah hit a four-year low on Wednesday after comments from U.S. Federal Reserve officials boosted the dollar.

Inflation touched a seven-month high last month and moved closer to the upper limit of Bank Indonesia's (BI) 1.5 per cent-3.5 per cent inflation target range, suggesting policy rates would need to remain higher for longer.

Over 80 per cent, or 29 of 35, of the economists in the April 16-22 poll expected the central bank to hold its benchmark seven-day reverse repurchase rate at 6.00 per cent at its April 23-24 meeting. Six expected a quarter-point hike.

"We recently pushed back our first rate cut forecast ... given the movement of the rupiah on the back of fewer rate cuts expectation from the Fed by the market," said Makoto Tsuchiya, an economist at Oxford Economics.

"If the central bank were to deter further currency weakness, a 25 bps (basis points) hike is unlikely to do much ... BI will defend its currency by forex market intervention if necessary."

Median forecasts showed the first quarter-point cut coming next quarter, compared to expectations for a cut in the second quarter in a poll in March, followed by another reduction to 5.50 per cent by the end of December, versus 5.25 per cent seen previously.

That was in line with expectations around the Fed as a recent poll showed the first U.S. rate cut has likely been pushed to September.

Among those who provided interest rate forecasts for the third quarter with nearly two-thirds, 21 of 32 economists expect them to be 5.75 per cent or lower. But seven saw rates at 6.00 per cent and four at 6.25 per cent.

"We think the likelihood of a rate hike has risen ... BI is more likely to stay patient and proceed with care, not chasing the initial Fed cut," said Brian Tan, an economist at Barclays.

Only Barclays expected interest rates to be at 6.25 per cent by the end of the year.

There was a clear hawkish shift among economists as over half of the contributors, 15 of 26, raised their fourth quarter forecasts from a March poll. While 10 kept them unchanged, one lowered their rate expectation.

"For Indonesia, the prime driver of monetary policy action is Fed action, not necessarily inflation unless it goes way beyond target," said Kunal Kundu, an economist at Societe Generale.

"Headline inflation remaining above its (BI's) median target of 2.5 per cent suggests that the trajectory of ... rate-easing cycle could be shallow."

While inflation was expected to average 2.9 per cent this year and 3.0 per cent in 2025, economic growth was seen steady at 5.0 per cent in 2024 from 5.05 per cent in 2023 and is forecast to be 5.1 per cent next year.

(For other stories from the Reuters global economic poll)//VOI

Mount Ruang of Sitaro District, North Sulawesi, erupts. (17/4/2024). (ANTARA/HO-PVMBG) - 

VOInews, Jakarta : The Center for Volcanology and Geological Hazard Mitigation (PVMBG) on Sunday has lifted a tsunami advisory previously issued following the eruption of Mount Ruang in Sitaro District of North Sulawesi Province.

"The potential for large eruptions is decreasing, so the chance for tsunamis to occur is less likely," said Head of PVMBG Hendra Gunawan in a statement received here on Sunday.

On April 1-21, 2024, until 12:00 local time (GMT+8), PVMBG recorded as many as 10 eruptions on Mount Ruang starting on April 16, at 1:37 p.m. local time.

A major eruption occurred on April 17, at 8:15 p.m. local time. The continuous eruption was accompanied by rumbling sounds and vibrations felt up to the Mount Ruang Observation Post in Tulusan Village, Tagulandang Sub-District.

Explosive eruptions occurred on Ruang Island, followed by the release of incandescent material and hot clouds. Meanwhile, Tagulandang Island was raining stones and sand, spewed from the volcano which is 10 kilometer away. 

The results of visual monitoring carried out by PVMBG on April 21, until 12:00 local time recorded thick white smoke as high as 200 meters from the main crater and no eruption was observed.

"This showed a decrease in eruptive activity on Mount Ruang," said Gunawan. 

On April 21, from 00:00-12:00 local time the PVMBG recorded 25 shallow volcanic earthquakes and 19 deep volcanic earthquakes.

The PVMBG team has installed a seismic monitoring station at the Mount Ruang Observation Post which is about five kilometers from the peak to monitor the activity of the volcano//Antara - VOI

Indonesian Finance Minister, Sri Mulyani during the G20 Summit in Bali 2022 (archive) - 

VOInews, Jakarta : The government is currently devising strategies for protecting the exchange rate of rupiah from adversary impacts of the Iran-Israel conflict, Finance Minister SriMulyaniIndrawati has said.

The minister observed that the current global situation would surely affect Indonesia's economy, including by disrupting the exchange rate of its national currency.

"We will continue to maintain the stability of the macro economy, both from the monetary and fiscal sides. To adapt to the mounting pressure, we have been in coordination with Bank Indonesia," she noted in her Instagram account @smindrawati, as cited in Jakarta on Sunday.

She added that the government had been striving to ensure that the APBN (state budget) can play the role as an effective and credible shock absorber.

The minister said she acknowledges that the strengthening of the US dollar exchange rate against rupiah might lead to an increase in the value of Indonesian exports.

She, however, noted that such a trend would also adversely affect the country's inflation rate.

On that note, Indrawati emphasized that the government would continue to take anticipatory measures while paying close attention to global dynamics.

"I believe that Indonesia will stand resilient in the midst of this situation," she said.

The state treasurer also expressed optimism about the national economy surviving global uncertainties, like it did during the COVID-19 pandemic era.

"With the support from our strong exports as well as surpluses in the trade balance, I believe that Indonesia's economy will remain stable as expected," she stated.

Earlier, Bank Indonesia affirmed that it would strive to ensure that the exchange rate of rupiah remains stable in the midst of declining US Fed Fund Rate (FFR) and geopolitical tensions escalating in the Middle East.

"We have been striving to maintain the stability of rupiah by resorting to foreign exchange intervention and taking other necessary measures," Bank Indonesia Governor Perry Warjiyo remarked here on Friday (April 19).

In order to sustain Indonesia's economic resilience, he added, Bank Indonesia has been managing the flow of market-friendly foreign portfolios, including by implementing pro-market monetary operations that are integrated with money markets//Antara-VOI

KBRN, Jakarta: Member states of the Association of Southeast Asian Nations (ASEAN) are calling on all parties to immediately stop violence, exercise restraint, and realise peace along the border areas of Myanmar and Thailand. "Take all necessary measures to ease tensions and ensure peace, protection and safety of all civilians, including foreign nationals and citizens of ASEAN member states," said a joint statement of ASEAN Foreign Ministers received by Indonesia Window here on Thursday (18/4/2024).

ASEAN Foreign Ministers expressed concern over Myanmar's conflicts including in Rakhine State, Myanmar which caused the displacement of civilians. ASEAN does not want any further humanitarian impact due to the escalation of all forms of conflict. "We call on all parties to take urgent measures to mitigate the impact of the conflict on civilians, including creating a safe and conducive environment," the statement said.

Ensuring the timely and safe delivery of humanitarian aid to all those in need in Myanmar without discrimination was also stressed by the regional organisation. It also called for mobilisation of support for humanitarian negotiation efforts to address the humanitarian consequences in Myanmar and an inclusive national dialogue towards a durable and comprehensive political solution in Myanmar.

ASEAN reaffirmed its commitment to assist Myanmar in finding a solution by helping to create a conducive environment through the full and speedy implementation of the Five-Point Consensus as a whole. This is because the Five-Point Consensus is considered important in helping the people of Myanmar achieve an inclusive and durable peace for peace, security and stability in the region. "We support the ongoing efforts of the AHA Centre, as well as Thailand's cross-border humanitarian initiatives, which are in line with the Five-Point Consensus and coordinated with the ASEAN Chair through the ASEAN Chair's Special Envoy for Myanmar," the statement said.

25 Rohingya civilians were killed and thousands more forced to flee their homes due to the Myanmar Military Junta's attacks last weekend. The attacks in Rakhine state were carried out through airstrikes and heavy artillery. (Daniel).

Source: Antara