Sign up | Log in



Home  >>   Daily News  >>Indonesia>>Economy>>Tax pardon to maintain inflows despite Fed rate hike: Bank Indonesia
NEWS UPDATES Asean Affairs     November 7,  2016  

Tax pardon to maintain inflows despite Fed rate hike: Bank Indonesia

Bank Indonesia (BI) has expressed optimism that foreign capital will continue to flow into the financial market until the year-end despite stronger signals from the US Federal Reserve for a Fed funds rate hike in December.

A BI board of governors meeting earlier anticipated the Fed's decision and expected to see the US benchmark interest rate increase in December followed by two more rises next year, as well as three more upsurges in 2018, BI deputy governor Perry Warjiyo said.

"We don't only recognize the Fed's decision, but also its communication tone, which has been less hawkish lately," he told journalists in Jakarta on Thursday.

Aside from monitoring portfolio and foreign direct investments, the Indonesian central bank will also pay attention to asset repatriation from the first round of the tax amnesty which, according to Perry, will lead to capital inflows at the end of the year amid the challenging global economic situation.

The government has given a deadline until year-end to repatriate assets for those who participated in the first phase of the program, from July to September. Some Rp 43 trillion of repatriated assets are set to enter the country until the end of December.

Perry acknowledged that uncertainties in the global market, especially in the US, had increased as the US presidential election approached. However, Indonesia so far has yet to feel any effects from it.

"Portfolio [investments] keep flowing in, the value is relatively stable and good enough," he said, adding that as much as Rp 157 trillion (US$12 billion) of capital inflows had entered the country as of last week.

The rupiah has strengthened by more than 5 percent against the greenback so far this year. It closed the day at Rp 13,075 per US dollar on Thursday, weakened by 0.14 percent from the previous close, Bloomberg data show.

Fed policy makers left interest rates unchanged in November while saying the argument for higher borrowing costs strengthened further amid accelerating inflation, reinforcing expectations for a hike next month, Bloomberg reported.

“The committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives,” the Federal Open Market Committee said in a statement Wednesday following a twoday meeting in Washington.

Deutsche Bank chief economist Taimur Baig said emerging markets should not be too concerned over the Fed's decision, asserting that domestic consideration of an economy was more important than the global one.

"I think the market has been closely following the Fed. The market is not surprised by the Fed's decision this morning, the market is not surprised that the hike is in December. It's already priced in," he said during a media discussion in Jakarta on Thursday.

The Jakarta Composite Index (JCI), the benchmark of the Indonesia Stock Exchange (IDX), weakened by 1.41 percent to close the day on Thursday at 5,329. The index outperforms its peers by gaining around 18 percent of its value so far this year.

The drop in the JCI was not caused by concerns over the Fed’s decision as its effects were likely minimal to Indonesia, Asjaya Indosurya Securities analyst William Surya Wijaya said. "Investors are in a wait-and-see mode as many important events will take place next week, such as the US GDP [gross domestic products] result and the presidential election," he said by phone.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below

Today's  Stories                           November  7, 2016 Subsribe Now !
• Telenor Myanmar to shift focus towards data services Subcribe: Asean Affairs Global Magazine
• Tax pardon to maintain inflows despite Fed rate hike: Bank Indonesia
• Total: Third well drill at MLJ3 under way 
Research Reports
on Thailand 2007-2008

• Textiles and Garments Industry
• Coffee industry
• Leather and footwear industry
• Shrimp industry

• KrisEnergy ups stake to unclog offshore Block A oil 
• Energy, mining, financial services holdings to be formed first: SOE minister
Asean Analysis                  September 30, 2016
• Asean Analysis  September 30, 2016
In Washington, Yasay Defends the Duterte Doctrine
Advertise Your Brand

Asean Stock Watch   November 4 , 2016
• Asean Stock Watch-November 4, 2016
The Biweekly Update
• The Biweekly Update  September 30, 2016

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2020 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand