mitigating the effect of global spillovers - imf.org · the greatest risk to indonesian economic...

MITIGATING THE EFFECT OF GLOBAL SPILLOVERS:Indonesia’s Experience

Dr. HendarDeputy Governor Bank Indonesia

INTERNATIONAL SEMINAR ONCOPING WITH MACROECONOMIC VULNERABILITIES AND SPILLOVERS

TOKYO, NOVEMBER 7-8, 2016

2Outline

1. Global Environment and Spillovers

3. Policy Responses

2. Domestic Economy Issues

4. Economic Performances

3

US ↓Economy

GLOBAL ↓ECONOMY

WTV↓↓

DOMESTICECONOMY↓

Spillovers

Bank Loan↓

NPL↑

Private SectorConsolidation Fiscal Space↓

INFLATION↓

GLOBAL: Fragile recovery DOMESTIC: Consolidation Mode

POLICY COORDINATION

Monetary Policy

Fiscal Policy

Micro/MacroprudentialPolicy

StructuralPolicy

UncertaintyFFR, China’s

Slowdown,Brexit

Banking Resiliencies

Global Spillovers Effect on Indonesian Economy

Structural Issues

TFP↓, Labor↓, Capital↓Cyclical Issues

Oil Price ↓

Less Vertical Specialization

Trade Channel (incl. Comm. Price channel)

Financial Channel

4

GLOBAL ENVIRONMENT & SPILLOVERS

5

In the period following the GFC, worldeconomy is facing a “New Norm” oflower economic growth…

Challenge #1: Uneven and Slow Global Economic Recoveries

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

p

WorldAdvanced Ec.Emerging Market and Developin Ec.

(%)

GLOBAL ECONOMIC GROWTH (%, yoy)

-4

-3

-2

-1

0

1

2

3

4

5

6

Low (1,2%) Moderate (2,8%) High (3,9%) AE

%

0

1

2

3

4

5

6

7

8

9

10

Low (3,5%) Moderate (4,4%) High (7,4%) EM

%

EMERGING MARKET GROWTH (%, yoy)ADVANCED ECONOMIES GROWTH (%, yoy)

• AE countries tend to stay at low economic growth regime

• EM countries stay in the moderate growth regime

6

The decline in world trade volume also contributed by weaken relationship betweenglobal growth and international trade…

Challenge #2: Declining World Trade Volume & Commodity Prices

-20

-15

-10

-5

0

5

10

15

20

3/1

/20

00

5/1

/20

01

7/1

/20

02

9/1

/20

03

11

/1/2

00

4

1/1

/20

06

3/1

/20

07

5/1

/20

08

7/1

/20

09

9/1

/20

10

11

/1/2

01

1

1/1

/20

13

3/1

/20

14

5/1

/20

15

World GDP

WTV

Source: Bloomberg, CPB, (processed)

%

0

20

40

60

80

100

120

140

19

99Q

1

19

99Q

4

20

00Q

3

20

01Q

2

20

02Q

1

20

02Q

4

20

03Q

3

2004

Q2

20

05Q

1

20

05Q

4

20

06Q

3

20

07Q

2

20

08Q

1

20

08Q

4

20

09Q

3

20

10Q

2

20

11Q

1

2011

Q4

20

12Q

3

20

13Q

2

20

14Q

1

20

14Q

4

20

15Q

3

20

16Q

2

Commodity Prices Index

TRADE VOLUME & GLOBAL ECONOMIC GROWTH (%, yoy) COMMODITY PRICES INDEXIndex

7Challenge #3: Asynchronous Monetary Policies in Advanced Ec.

Uneven pace of economy recoveries lead to different state of monetary policies particularly in Advanced Economies…

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016p2017p

Euro USA Japan

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Mar

-08

Au

g-0

8

Jan

-09

Jun

-09

No

v-0

9

Ap

r-1

0

Sep

-10

Feb

-11

Jul-

11

De

c-1

1

May

-12

Oct

-12

Mar

-13

Au

g-1

3

Jan

-14

Jun

-14

No

v-1

4

Ap

r-1

5

Sep

-15

Feb

-16

Jul-

16

ECB Refinance Rate US FFR

Japan O/N Call Rate

ADVANCED ECONOMIES GROWTH (%, yoy) POLICY RATES IN ADVANCED ECONOMIES (%, yoy)

8

Source: ANZ

Global Challenges Lead to Volatile Capital Flows to EMs

Uncertainties in global financial market due to asynchronous monetary policies in Advanced Economies and China’s economic slowdown led to volatile capital flows to emerging market…

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

2012-01-03 2013-01-03 2014-01-03 2015-01-03 2016-01-03

VIX

FOREIGN PORTFOLIO FLOWS to EMs RISK PERCEPTIONS (VIX)

9

DOMESTIC ECONOMY ISSUES & IMPACT OF SPILLOVERS

10Issue #1: Indonesian Commodity Based Economy

The spillover effect of declining in global economic growth and commodity prices are amplified by Indonesian economy structure that is dominated by commodity sector…

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q.1

Q.2

Q.3

Q.4

Q.1

Q.2

Q.3

Q.4

Q.1

Q.2

Q.3

Q.4

Q.1

Q.2

Q.3

Q.4

Q.1

Q.2

Q.3

Q.4

Q.1

Q.2

Q.3

Q.4

Q.1

Q.2

2010 2011 2012 2013 2014 2015** 2016***

Commodity Related Commodity Unrelated

Diperjelas

0.0

1.0

2.0

3.0

4.0Karet

Kelapa Sawit

Batubara danlignit

Besi dan BajaDasar

Bijih Tembaga

Textile

Footwear

Motorcycles

ResidentialBuildings

Road, Bridge,and Ports

Forward Linkage per-Sector Average of 185 Sectors

Source: I-O Table 2010, BPS (processed)

Rubber

Palm Oil

Coal & Lignite

Iron & Steel

Copper Ore

Commodity-Based

Noncommodity-Based

COMMODITIES & NONCOMMODITIES SHARE of GDP (%) COMMODITIES FORWARD LINKAGES in GDP

11

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

Source: I-O Table, BPS - (processed)

Export/Output (%)

Import/Input (%)

Industry

SECTOR

Transportation &Telecommunication

Mining

Construction

Services

Trade, Hotel, & Restaurant

Electricity & Gas

Financial Services

Agriculture

Issue #2: High Import Content in Indonesian Export Product

Indonesian export not only mainly related to commodity, but also has high importcontent…

IMPORT CONTENT of INDONESIAN EXPORT (%) PRIMARY PRODUCT & MANUFACTURE EXPORT

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Jan

Ap

r

Jul

Oct

Jan

Ap

r

Jul

Oct

Jan

Ap

r

Jul

Oct

Jan

Ap

r

Jul

Oct

Jan

Ap

r

Jul

Oct

Jan

Ap

r

Jul

Oct

2010 2011 2012 2013 2014 2015

Manufacture Primary

Mil. USD

12Issue #3: Indonesian Shallow Financial Sector

While financial sector openness creates opportunity to harvest benefit from accessto global financial market, it creates vulnerability on Indonesian economy toexternal shocks…

-

10,000

20,000

30,000

40,000

50,000

60,000 Forward Spot

(Million USD)

39.1

34.5

9.7

10.1

13.6

0

5

10

15

20

25

30

35

40

45

Mar

-08

Au

g-0

8

Jan

-09

Jun

-09

No

v-0

9

Ap

r-1

0

Sep

-10

Feb

-11

Jul-

11

De

c-1

1

May

-12

Oct

-12

Mar

-13

Au

g-1

3

Jan

-14

Jun

-14

No

v-1

4

Ap

r-1

5

Sep

-15

Feb

-16

Indonesia Malaysia

Korea Japan

Thailand

(%)

FOREIGN HOLDING on GOVERNMENT BONDS DAILY TURNOVER FOREX TRANSACTIONS 2016

13The Effect of Spillovers on Indonesian Economy

US and China have significant effects to Indonesian macro variables

The greatest risk to Indonesian economic growth is China’s economic growth slowdown (throughtrade channel).

One of the greatest risks to Indonesian exchange rate stability is US interest rate hike (throughfinancial channel).

Shocks from US and China (broad money, GDP, and interest rate).

Source: Harahap et al (2016)

-0.22-0.14

0.51

-0.15

0.30

0.05

-0.59

0.12

-0.06 -0.04

0.69

0.15

-0.84

-0.12

1.31

0.110.04

-0.01 -0.07 -0.01

GDP Inflation RER Interest Rate

US broad money US GDP US (shadow) interest rate PRC GDP PRC RER

SUMMARY of GLOBAL SPILLOVERS’ IMPACT on INDONESIAN ECONOMY

14Spillover Impact through Financial Channel

-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

2008 2009 2010 2011 2012 2013 2014 2015 2016

CB Bills Bonds Equity TOTAL Volatilities ER (RHS)

(million USD) (%)

GFC Euro Crisis Taper Tantrum FFR & China Dev

QE 1 QE 2Dovish

FFR

Global uncertainties significantly affect Indonesian portfolio capital flows as well as Rupiah exchange rate stability…

PORTFOLIO CAPITAL FLOWS to INDONESIA

15

-50

-40

-30

-20

-10

0

10

20

30

40

50

-10,000

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

2008 2009 2010 2011 2012 2013 2014 2015 2016

Capital Flows - Equity JCI (mtm, RHS)

(Million, USD) (%)

Capital Flows Affect Domestic Financial Asset Prices

CAPITAL FLOWS & INDONESIA’S STOCK MARKET

5

5.5

6

6.5

7

7.5

8

8.5

9

9.5

10

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

2010 2011 2012 2013 2014 2015 2016

Capital Flows - Bonds GIDN10YR (RHS)

Correl: -0.3

(million USD) (%)

CAPITAL FLOWS & INDONESIA’S BOND MARKET

Capital flows contribute on Indonesian asset prices movement both on bond andcapital market…

16

Countries Impact of Real Export*)

US -0,78%

China -1,45%

EU -0,12%

• From the trade channel, the spillover of decliningChina’s GDP has the most significant impact onIndonesian export compared to US and EU.

• Due to high elasticity of some exported commodityto China such as metal, processed food dan electricalappliances.

Spillover Impact through Trade Channel

China’s economy has the most significant impact on Indonesian export

*) assuming 1% decline in each country – ceteris paribus

SHOCK of -1% US GDP

TOTAL -0.12

Other Commodities -0.09

10 Main Comm. -0.14

1 Chemical -0.7

2 Coal -1.1

3 Copper 0.0

4 CPO -3.1

5 Elect. Appliance -0.9

6 Processed Food -2.0

7 Metal Product -0.7

8 Pulp & Paper -0.4

9 Rubber Product -0.2

10 Textile -1.0

TOTAL 0.71

Other Commodities 0.25

10 Main Comm. 0.46

Exp

ort

Shar

e

Variables

10

Mai

n

Cn

tr.

TOTAL -1.45


10 Main Comm. -0.71

1 Chemical -0.9

2 Coal -1.2

3 Copper 0.0

4 CPO -3.6




8 Pulp & Paper -0.4


10 Textile -1.2

TOTAL 0.71


10 Main Comm. 0.46

Exp

ort

Shar

eVariables

10

Mai

n

Cn

tr.

TOTAL -0.78


10 Main Comm. -0.92

1 Chemical -1.0

2 Coal -1.4

3 Copper 0.0

4 CPO -4.1




8 Pulp & Paper -0.5


10 Textile -1.3

TOTAL 0.71


10 Main Comm. 0.46

Exp

ort

Shar

e

Variables

10

Mai

n

Cn

tr.

SHOCK of -1% CHINA’s GDP SHOCK of -1% EU’s GDP

17Spillover Impact on Indonesian Economic Growth

Indonesian economy is the mostsensitive to China’s economy due to itsexport structure…

• The effect of China’s slowing down greater than that of the US

– China’s Shock : GDP declines up to 0.52% in the first year higher than Brazil, Korea, and Japan

– US’ Shock : GDP declines up to 0.28% in the first year

• Indonesian economy is also prone to FFR shock

SPILLOVER IMPACT of NEGATIVE CHINA’s GDP SHOCK (-1%)

Source: Harahap, et al (2015)

SPILLOVER IMPACT of POSITIVE US’ GDP SHOCK (1%)

SPILLOVER IMPACT of POSITIVE FFR SHOCK (1%)*)

*) after 3 years

18

POLICY RESPONSES

19Bank Indonesia Policy Mix: Managing the Trilema

Monetary and Macro-prudential Policy (instrument) mix

Maintaining monetary policy autonomy to achieve price stability and financial stability• Interest rate to address inflation

expectation• Macro-prudential measures to manage

liquidity and financial stability

Capital Flow Management

Managing capital flow• Manage capital flow especially short term• Risk management of corporate sector

borrowings • Promote financial deepening (FX market,

bonds market, money market)

Exchange Rate Management

Stabilizing exchange rate movement in line with its fundamental• Smoothing out ER volatility• Acummulate FX reserves during inflows

and use the reserve during outflows (self insurance)

20

Monetary Policy Measures

Sterilized FX market intervention

Dual intervention (FX and bonds intervention

simultanously)

Interest rate

FX Reserve acummulation

Capital Flows Management

Minimum Holding periods for short

term bills (CB bills)

- Increase duration during inflows

- Reduce duration during outflows

Risk Management of Corporate FX

borrowings (hedging

requirement, FX liquidity req, credit

rating)

Macroprudential Measures

Reserve Requirement Rp and FX

LDR-linked reserve requirement

Introducing LFR

Abolishment the 30 minutes NOP

Limiting Short Terms Borrowings Exposure of Banks (eg 30% capital)

Loan To Value Ratio for Housing Loans and

Down Payment Rule for Automotive Loans

Structural Policy

Financial market deepening (FX market,

bonds market and money market)

Export proceed regulation

Policy Responses to Capital Flows: Indonesia’s Experience

212010-2012

Early Global Recovery…2013-2014

Uncertainties Era… 2015 – Present

Sluggish Global Recovery..

• Easing Bias Monetary Policy :- Easing Bias policy from Nov 2015 - Policy rate cut by 150 bps- New policy rate (Aug 2016) - Rp. reserve requirement cut by 1.5%- Intervention to control volatility

• Macroprudential Policy- Relaxing LTV requirement

• Easing of CFM’s- Smoothing capital flow volatility

• Coordination with government- Structural reform: infrastructure & investment climate

• Global GDP slowdown• Commodity prices peak in Q2-2011

& started to fall• Global excess liquidity• Ultra low interest rate • Quantitative easing in US and EZ• Moderate global market volatility

• Easing Monetary Policy :- Policy rate cut by 75 bps- Intervention to control volatility

• Macroprudential Policy:- Enhancing bank risk management -Increased Rp. reserve requirement-Introduced LTV

• Tightening CFM’s- “Putting sand on the wheel” to mitigate impact of capital surges

- Increased FX reserve requirement• Coordination with government

- Regional inflation coordination team

• GDP slowdown esp. In EM• China rebalancing • Commodity prices continue to fall• High global volatility• Fed initiates monetary policy

normalization (tapering)

• CA deficit reach highest level • Large capital outflow in 2013 but

inflow 2014• Rupiah depreciation• High inflation pressure, from

volatile and administered goods • Slow growth due to deterioration

of external sector• Slower credit growth

• Tightening Monetary Policy- Stability over growth- Policy rate increased by 200 bps- Intervention to control volatility

• Macroprudential Policy:- Tighter LTV requirement- LDR reserve requirement

• Easing of CFM’s- Smoothing capital flow volatility

• Coordination with government- 2nd round inflation effect of AP

hikes- Structural reform: subsidy policy

• Uneven and slow global growth• EM picking up; AE weaken• Consolidation in commodity prices• Moderate global uncertainty• Monetary Policy Divergence: • FFR hiked, further increase IS

expected at a slower pace• Continued easing MonPol in EZ & JP

• CAD improved; Capital inflows starting 4th q 2015

• Rupiah stabilized in 2015, appreciation trend in 2016

• Low inflation • Low exchange rate pass-through due

to weak demand & fuel Reform• Sluggish growth due to export &

limited fiscal space• Single digit credit growth

• Current Account deterioration• Surge in capital inflow as portfolio

inflows and debt• Rupiah appreciation• Stable inflation, inflation pressure

from administered prices (fuel)• Solid GDP growth fueled by solid

domestic demand and export• Strong credit growth

GLO

BA

LD

OM

ESTI

C

PO

LIC

Y M

IXC

ON

SID

ERA

TIO

NS

Bank Indonesia’s Policy Mix in the Post GFC Period

22

2010

Introduced SBI Lengthening Maturity Profile (implemented in a number of phases from Mar to Dec 2011)

Mar

• Introduced One Month Holding Period for SBI

• Introduced Rupiah Term Deposits

Jul

Nov

Increase Primary Rupiah RR from 5% to 8%

2011

Normalized the Policy to Limit Bank’s Short Term Ext. Borrowing (effective no later that the end of Jan 2011 with a 3-mo transition period)

Jan

Mar

Introduced Six Month Holding Period for SBI

May

Increased FX RR from 5% to 8%.

Jun

2012

Introduced LTV for Property and Automobile sectors.

Mar

Dec

2013

• Introduced new LTV scheme.• Increased Secondary RR

gradually from 2.5% to 4% in Dec.

• Adjust LDR based RR.

Mar2014

Introduced Prudential Principles

for the Management of Non-Bank

Oct

Jun2015 2016

• Relaxed MHP of SBI from 1 Month to 1 Week

• Lowering limit of non underlying FX purchases

• Increasing limit of non underlying Forward Sell

Sept

Des

- Lowered Rupiah RR

by 1%

Relaxed LTV

Ratio

Aug

Feb

Timeline: Bank Indonesia Policy Mix

Policy Rate hiked by 25bps

Feb

Oct & Nov

Policy Rate cut by 25bps

Feb

Policy Rate hiked by 175bps (Cumulative)

Nov

Policy Rate Hiked by 25bps

Policy Rate Cut by 150 bps (Cumulative)

Policy Rate Cut by 25bps

Feb Jan -Oct

• Increased Foreign Currency RR from 1% to 5%.

• Introduced LDR based RR.

Introduced Receipt of Export Proceeds

Regulation

Relaxed LTV ratio

Lowered Rupiah RR by 0.5%

Policy Rate cut by 50bps (Oct.&Nov.)

Jan-Dec

23

ECONOMIC PERFOMANCES

24Macroeconomic Stability has been restored

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

Jan

-09

May

-09

Sep

-09

Jan

-10

May

-10

Sep

-10

Jan

-11

May

-11

Sep

-11

Jan

-12

May

-12

Sep

-12

Jan

-13

May

-13

Sep

-13

Jan

-14

May

-14

Sep

-14

Jan

-15

May

-15

Sep

-15

Jan

-16

May

-16

Sep

-16

CPI CORE VF ADM

(%,yoy)

The consistency of macroeconomic policy mix implementation has been able toregain macroeconomic stability as reflected on the within target inflation rate andlower current account deficit…

INDONESIAN INFLATION (%, yoy)

-2.08

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1

2010 2011 2012 2013 2014 2015 2016

(% GDP)

INDONESIAN CURRENT ACCOUNT (% GDP)

25

2.29

5.43

22.97

12.5

15.0

17.5

20.0

22.5

25.0

2.0

3.0

4.0

5.0

6.0

7.0

Ju

l-0

6

No

v-0

6

Ma

r-0

7

Ju

l-0

7

No

v-0

7

Ma

r-0

8

Ju

l-0

8

No

v-0

8

Ma

r-0

9

Ju

l-0

9

No

v-0

9

Ma

r-1

0

Ju

l-1

0

No

v-1

0

Ma

r-1

1

Ju

l-1

1

No

v-1

1

Ma

r-1

2

Ju

l-1

2

No

v-1

2

Ma

r-1

3

Ju

l-1

3

No

v-1

3

Ma

r-1

4

Ju

l-1

4

No

v-1

4

Ma

r-1

5

Ju

l-1

5

No

v-1

5

Ma

r-1

6

Ju

l-1

6

ROA (%) NIM (%) CAR (%, rhs)

Financial System Stability remains strong

Indonesia’s financial stability remains robust supported by high capital and NetInterest Rate Margin. Although NPL tends to increase, it is still much lower than thethreshold…

INDONESIAN BANKING PERFOMANCES (%) NON PERFORMING LOAN (%)

2.29

5.43

22.97

12.5

15.0

17.5

20.0

22.5

25.0

2.0

3.0

4.0

5.0

6.0

7.0

Jul-

06

No

v-0

6

Ma

r-0

7

Jul-

07

No

v-0

7

Ma

r-0

8

Jul-

08

No

v-0

8

Ma

r-0

9

Jul-

09

No

v-0

9

Ma

r-1

0

Jul-

10

No

v-1

0

Ma

r-1

1

Jul-

11

No

v-1

1

Ma

r-1

2

Jul-

12

No

v-1

2

Ma

r-1

3

Jul-

13

No

v-1

3

Ma

r-1

4

Jul-

14

No

v-1

4

Ma

r-1

5

Jul-

15

No

v-1

5

Ma

r-1

6

Jul-

16

ROA (%) NIM (%) CAR (%, rhs)

26Macroeconomic Vulnerability also improves

Macroeconomic vulnerability continues to improve mainly due to diminishingpublic and real sector vulnerabilities…

• Strong International Reserve also provides enough cushion in the even of external shock

• The Indonesian Government effort to control the government debt contributes positively on theincreasing the resiliencies of public sector

• On the other hand, the consistency of Bank Indonesia to maintain inflation inline with the targetreduces the vulnerabilities of real sector

0

20

40

60

80

100

120

140

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep-

11

Feb-

12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

Nov

-15

Apr

-16

Sep-

16

(billion USD)

INDONESIA’S INTERNATIONAL RESERVES

27Indonesian Economic Growth has been stabilized

The consistency of macroeconomic policy mix implementation has also paved thegrowth momentum of Indonesian economic in the midst of sluggish globaleconomic recovery and declining commodity prices…

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

Mar

-07

Jul-

07

No

v-0

7

Mar

-08

Jul-

08

No

v-0

8

Mar

-09

Jul-

09

No

v-0

9

Mar

-10

Jul-

10

No

v-1

0

Mar

-11

Jul-

11

No

v-1

1

Mar

-12

Jul-

12

No

v-1

2

Mar

-13

Jul-

13

No

v-13

Mar

-14

Jul-

14

No

v-1

4

Mar

-15

Jul-

15

No

v-1

5

Mar

-16

Indonesia Korea Malaysia

Phillipines Singapore Thailand

(%)

ECONOMIC GROWTH in SOME ASIAN COUNTRIES

28Capital Inflows to Indonesia remains strong

Well maintained market confidence due to strong performance of Indonesianeconomic and attractive yields support capital inflows as well as Rupiahexchange rate appreciation…

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

-5000

-4000

-3000

-2000

-1000

0

1000

2000

3000

4000

Mar

-13

May

-13

Jul-

13

Sep

-13

No

v-1

3

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14

No

v-1

4

Jan

-15

Mar

-15

May

-15

Jul-

15

Sep

-15

No

v-1

5

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

SBI SUN Stock IDR/US

Source: Bank Indonesia, IDX, Bloomberg

US Million

PORTFOLIO CAPITAL FLOWS & RUPIAH EXCHANGE RATE

(RHS)

29

THANK YOU

30Vulnerable Global Economic Recovery

Global economic growth is not as strong as what we expected before ...

Perkiraan

Feb 2016

IMF

(WEO)

Perkiraan

Feb 2016

IMF

(WEO)

World 3.4 3.1 3.4 3.1 3.0 3.1 3.6 3.3 3.2 3.4

AS 2.4 2.4 2.6 2.0 1.8 2.2 2.5 2.2 2.2 2.5

Euro 0.9 1.7 1.7 1.5 1.5 1.6 1.7 1.6 1.4 1.4

Japan 0.0 0.5 1.0 0.5 0.5 0.3 0.4 0.0 0.1 0.1

China 7.3 6.9 6.3 6.5 6.5 6.6 6.0 6.2 6.2 0.1

India 7.2 7.6 7.5 7.5 7.3 7.4 7.5 7.5 7.4 0.1

20172016

Perkiraan

Jun 2016

Perkiraan

Sep 2016

20152014 Perkiraan

Jun 2016

Perkiraan

Sep 2016

* *

*Juli 2016 estimation

Feb 2016 Estimation

Jun 2016 Estimation

Sept 2016 Estimation

WEO*Feb 2016

EstimationJun 2016

EstimationSept 2016 Estimation

WEO*

mitigating the effect of global spillovers - imf.org · the greatest risk to indonesian economic...

Documents