• 8 months ago
Rapat Dewan Gubernur Bank Indonesia bulan April 2024 memutuskan untuk menaikkan tingkat suku bunga acuan BI Rate sebesar 25 BPS menjadi 6,25%. Kenaikan BI Rate untuk pertama kali setelah bertahan di level 6% selama 6 bulan terakhir ini, guna memperkuat stabilitas nilai tukar Rupiah dari dampak memburuknya risiko global, serta sebagai langkah pre-emptive dan forward looking untuk memastikan inflasi tetap dalam sasaran 2,5 plus minus 1% pada tahun 2024 dan 2025.

Bank Sentral ikut menaikkan suku bunga deposit facility sebesar 25 basis poin menjadi 5,50% dan suku bunga lending facility sebesar 25 basis poin menjadi 7%.

Bank Sentral juga terus memperkuat bauran kebijakan moneter, makroprudensial dan sistem pembayaran untuk menjaga stabilitas dan mendukung pertumbuhan ekonomi yang berkelanjutan, di tengah peningkatan ketidakpastian pasar keuangan global.

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Transcript
00:00 [Music]
00:15 Hello viewers, straight from the IDX Channel Jakarta studio.
00:18 I am Prasetya Wibo, welcome back to Market Review.
00:20 Which will address the issues of Indonesia's economic movement.
00:23 Live streaming, you can watch it on IDXchannel.com.
00:25 And this time we will discuss the policy of Bank Central, Bank Indonesia.
00:29 Which eventually increased the BIRET rate by 6.25%.
00:35 Let's start the complete market review.
00:37 [Music]
00:45 Yes, viewers, after 6 months of resistance,
00:47 Bank Indonesia finally decided to increase the BIRET rate by 6.25% in April.
00:54 This step is to strengthen the stability of currency exchange value
00:57 based on the development of the economic conditions and global geopolitics that are getting hotter.
01:05 The Indonesian Government's Bank Council in April 2024
01:09 decided to increase the BIRET rate by 6.25%.
01:13 The increase in BIRET for the first time after holding at 6% for the last 6 months
01:19 is to strengthen the stability of the currency exchange value from the negative impact of global risks
01:24 as well as as a pre-emptive and forward-looking step
01:26 to ensure that inflation remains within the 2.5 plus -1% target in 2024 and 2025.
01:35 In addition, Bank Central also decided to increase the deposit rate of 25 basis points
01:41 to 5.50% and the landing rate of 25 basis points to 7%.
01:49 The Indonesian Government's Bank Council in April 2024
01:58 decided to increase the BIRET rate by 25 basis points to 6.25%.
02:09 The increase in the deposit rate of 25 basis points to 5.50%
02:17 and the landing rate of 25 basis points to 7%.
02:24 The increase in the BIRET rate for the first time after holding at 6.50% for the last 6 months
02:30 is to strengthen the stability of the currency exchange value from the negative impact of global risks
02:34 as well as as a pre-emptive and forward-looking step
02:38 to ensure that inflation remains within the 2.5 plus -1% target in 2024 and 2025.
02:50 The Indonesian Government also continued to strengthen the policy of the monetary policy,
02:55 macro-prudential and payment system to maintain stability and support sustainable economic growth
03:03 amid the increase in the uncertainty of the global financial market.
03:07 Jakarta, IDX Channel coverage team.
03:10 Yes, Mr. Mir, to discuss our theme this time,
03:14 the global pressure is getting heavier.
03:16 The BIRET rate has risen to 6.25%.
03:18 We have been connected via Zoom with Mr. Rian Kirianto,
03:21 Senior Economic Associate Faculty of the Indonesian LPPI Development Institute.
03:26 Good morning, Mr. Rian.
03:27 Okay, Mr. Mir, it seems that we are experiencing a disruption in communication via Zoom
03:30 with Mr. Rian Kirianto and we are still trying to contact him
03:35 and discuss the current economic conditions in the middle of the decision of the Indonesian Government.
03:42 The Indonesian Government has decided to increase the BIRET rate from 6% before,
03:48 to 0.25% or 25 basis points, to 6.25%.
03:53 Okay, Mr. Mir, we will try again in the next segment and we will be disconnected for a while.
04:01 Okay, Mr. Mir, we will try again in the next segment and we will be disconnected for a while.
04:06 Okay, Mr. Mir, thank you for still joining us
04:25 and we will try again to communicate with Mr. Rian Kirianto.
04:29 Hello, Mr. Rian.
04:31 Hello, good morning, Mr. Praas.
04:33 Thank you for your time, Mr. Rian.
04:35 We have been having a little disruption in communication.
04:38 We have just been informed that the Indonesian Bank's representative
04:41 has finally increased the BIRET rate from 6% to 6.25%.
04:47 The global geopolitical pressure that ultimately threatens the weakening of the exchange rate value.
04:53 According to the LPPI's own view, is this central bank's decision correct, Mr. Rian?
04:59 After I learned the narration from the Indonesian Bank's Governor, Mr. Periwarjo, yesterday afternoon,
05:11 the background or the background of why the Bunga Acuan or BIRET rate should not be so aggressive,
05:19 only as big as 25 basis points, from 6% to 6.25%,
05:25 is purely influenced by external factors that have pressured almost all strong currencies in the world
05:33 and more currencies in emerging markets, including Indonesian rupiah.
05:39 We also just learned there that year to date,
05:45 our depreciation of rupiah against US dollars over the last 4 months,
05:52 which is on the 23rd of April, our currency has depreciated by approximately 5.07%.
06:01 Of course, this is one of the warnings for the Indonesian Bank
06:05 to immediately take the right actions,
06:09 which is not only forward-looking and pre-emptive, but with the right dosage.
06:17 That's why the increase of 25 basis points yesterday is quite ideal, I think.
06:22 Don't be too aggressive.
06:24 Because we can't see what the outlook of the US dollar is like now,
06:32 because the phenomenon of strong US dollars is really happening all over the world.
06:39 Even if we compare our currency with some other countries' currencies,
06:45 our depreciation rate is relatively lower.
06:50 But we can't just leave it like that,
06:53 because it can have a bad psychological effect on the market.
06:58 So, my note on the increase of the PI rate of 25 basis points yesterday is indeed tactical,
07:04 although maybe we used to know the term,
07:08 "The Indonesian Bank is giving a little bit of a bitter taste."
07:12 But the taste is not that bitter.
07:14 It's just a kind of wake-up call that the situation is heading towards conditions that may not be good.
07:22 That's the highlight, Mr. Prasit.
07:24 So, how about the steps that have been taken by the Central Bank
07:28 regarding the movement of the Rupiah value if it has already been 6.25% down, Mr. Ian?
07:34 So, after I was dead,
07:38 the decision of the Indonesian Bank's Governor Council yesterday to increase the PI rate of 25 basis points
07:43 is a recipe or a course that may be a bit of a wrap.
07:50 Why do I say a wrap?
07:52 Because, of course, before the increase of the PI rate,
07:55 the Indonesian Bank has already done an assessment or a deep study from various perspectives
08:02 by using monetary operations instruments,
08:05 then by using market operations instruments,
08:11 then the provision of instruments such as the Indonesian Rupiah Certificate,
08:20 the Indonesian Rupiah Certificate, the Indonesian Bank's Valas Certificate, and so on, including the DNDF.
08:26 Maybe it doesn't seem to have given the effect that the Indonesian Bank has been driving.
08:33 That's why the policy that I say is quite a wrap is to increase the PI rate by 25 basis points.
08:41 So, again, this is an early warning
08:45 that the global situation is not just good
08:49 and is threatening almost all world currencies.
08:53 That's why in the Indonesian Bank's narration yesterday,
08:57 the alibi is a single mass price,
08:59 which is in the framework of stabilizing the value of the Indonesian Rupiah.
09:03 So, it's no longer called in the framework, for example, to control inflation.
09:08 Because so far our inflation is 3.0,
09:11 the monthly inflation is 3.1.
09:13 So, it's actually not that bad.
09:17 It's still in the corridor.
09:20 But on the side of the Indonesian Rupiah, it must be managed properly.
09:25 But what about other policies that have been imposed by the government and the Central Bank?
09:30 If this is a weapon of the unclean that has been released,
09:33 what about the other ammunition?
09:35 The export deficit, then what about our deficit reserves?
09:39 Is it not strong enough to withstand the pressure on the Indonesian Rupiah?
09:44 Because the factor is a combination,
09:47 I can say, maybe if I'm percentage,
09:50 the majority, 70-80% of our Rupiah deficit factors are global or external factors.
09:56 Whether it's a negative sentiment from the escalation of war in the Middle East,
10:00 which is then combined or brought up with the plan of the FED
10:07 which will require the Bunga Acuan tribe to be delayed,
10:10 so that the phenomenon we know as "buy for longer" occurs.
10:15 The US green inflation is still high, 3.4%.
10:18 That's what made the initial plan of the FED to decrease the Bunga Acuan tribe
10:24 or the FED Fund in June,
10:26 shifted to September.
10:28 There was even one foreign institution that I monitored,
10:32 in an extreme way,
10:34 even said, "Forget about the increase in the Bunga Acuan tribe this year."
10:38 "The possibility of the decrease in the Bunga Acuan tribe,
10:42 will never happen this year, but maybe it will be shifted to next year."
10:46 These kinds of tones gave one consideration
10:49 to other central banks, including our Bank Indonesia,
10:53 to also see a situation like that.
10:56 That's why the situation of "buy for longer" was then responded to,
10:59 one of them was the previous one,
11:01 the PI raised the Bunga Acuan tribe by 25 basis points.
11:05 Because the external factors were relatively uncontrollable.
11:09 I also said,
11:11 this is not a matter of our currency,
11:15 it can only be a kind of responsibility of the BI itself,
11:19 but it also has to be hand-on-hand or collaboration
11:25 with the government through the Ministry of the Interior
11:27 to give confidence to the public,
11:31 to the market players,
11:33 to the public sector.
11:35 For example, we used to discuss,
11:38 how to progress from the accumulation or accumulation of export profit,
11:43 export revenue deficit.
11:44 This is stopped, right?
11:45 This should be re-connected and more disciplined,
11:49 so that our exporters,
11:51 with pleasure, are willing to place
11:54 at least 30% of their export revenue deficit
11:57 into the domestic financial system,
11:59 so that it will help in the availability of our foreign currency.
12:02 - So far, it's not effective, Tarian. - Why?
12:05 So far, it's not effective at the HEE,
12:07 because it is expected to maintain the liquidity of the Rupiah,
12:11 and then the need for dollars too, right?
12:14 So far, there have been impressions,
12:18 that only Bank Indonesia is doing well,
12:21 by providing SRBI, SVBI,
12:25 or the Valas Bank Indonesia certificate,
12:27 which is intended to attract capital inflow,
12:31 so that foreign currency flows into the country,
12:34 strengthen our financial market,
12:36 strengthen our foreign reserve.
12:39 But we can't,
12:41 what is the term, if we use the word "sepak bulanya",
12:44 we have to use double striker,
12:46 we can't use single striker, right?
12:48 So, Bank Indonesia collaborates with the government,
12:52 through the institution,
12:54 so that we can work together,
12:56 how to give confidence to the market,
12:58 so that it won't panic,
13:00 so that some of our people,
13:02 whether they know it or not,
13:05 can both borrow or hunt US dollars.
13:09 That's it.
13:10 The weakness of Rupiah that has happened,
13:12 has now exceeded 16 thousand,
13:14 which continues.
13:16 Will later, Mr. Arian,
13:18 trigger a high-cost economy in Indonesia?
13:22 Economy? What?
13:25 High-cost economy, in the sense that there is a fish market.
13:28 So, this is it, Mr. Bras.
13:30 One of the countries that is exposed
13:33 by the very strong appreciation of US dollars,
13:37 are countries that have a position as net importers.
13:43 Unfortunately, Indonesia,
13:46 in the context of our oil consumption,
13:49 our position is as net importers.
13:52 So, with the increase in the BIT rate yesterday,
13:55 the expectation, the hope is,
13:58 some of the asset holders,
14:01 or the fund holders,
14:04 they don't convert their Rupiah assets to US dollars.
14:08 Why?
14:09 With the increase in the BIT rate yesterday,
14:11 the spread, or the difference,
14:13 or the difference between the flower tribes in America,
14:17 or in the global currency market,
14:19 with the flower tribes in Rupiah,
14:21 has become widespread.
14:22 Before, it was only 50 basis points,
14:24 now it's 70 basis points.
14:26 Between BIT rate and Fed Fund rate.
14:28 This gives a kind of sweetener,
14:31 or an incentive to the fund holders
14:34 to not convert their Rupiah to US dollars.
14:38 On the contrary,
14:39 maybe it will make the dollar more profitable.
14:43 Because, we can observe,
14:46 the dollar index is also increasing tremendously.
14:48 Last April,
14:50 I checked, the dollar index was at level 106.
14:55 It means, how strong is the US dollar,
14:59 compared to almost all of the world's currency,
15:01 except for Poncelin, I see.
15:04 Okay.
15:05 Mr. Ariyan, so, how?
15:07 Okay, the disparity is indeed,
15:08 from the level of the BIT rate flower tribe,
15:10 then the Fed Fund rate,
15:11 this is getting further, from 6.25% to 5.5%.
15:14 But, on the other hand, in the country,
15:17 can it take a new position of balance?
15:21 A new equilibrium, if we look at it,
15:24 it is expected to be an attractive force for investment,
15:27 entering Indonesia with a fairly high spread,
15:30 between the Indonesian and American flower tribes.
15:33 We will discuss it in the next segment.
15:35 We will take a break for a while.
15:36 And, viewers, stay tuned with us.
15:38 [Music]
15:54 You are still watching Market Review.
15:56 In the next segment, we will present data,
15:58 related to the movement of the BIT rate.
16:00 After being held for the last six months,
16:02 6% for the Indonesian Bank or BIT rate flower tribe,
16:06 from 21 September, 5.75%,
16:08 it rose from 19 October, 2023, 6%,
16:11 and it held until 20 March, 2024, 6%.
16:14 And, in April,
16:16 the Indonesian Bank flower tribe rate rose to 6.25%.
16:19 And, next, we look at the movement of inflation.
16:22 This is the domain of the central bank,
16:25 which must be maintained.
16:26 As well as the movement of inflation,
16:27 in terms of months and also years.
16:29 0.52% per month,
16:32 in March, 2024, for the movement of inflation,
16:34 while, in terms of years,
16:36 3.05% data from the BPS,
16:39 the Statistics Agency.
16:41 And, next, we will look at the movement of our currency exchange rate.
16:44 On April 2, it still stands at 15,935,
16:48 and this is up to April 5.
16:50 Then, April 16, up to April 23,
16:53 the currency is already at 16,244,
16:57 US dollars.
16:59 Let's continue again,
17:01 discussing with Mr. Rian Kirianto,
17:03 Senior Economist and Associate Faculty
17:05 from the Banking Development Institute.
17:08 Mr. Rian, we will continue again.
17:10 Talking about the disparity
17:13 between the Indonesian Bank flower tribe
17:15 and the Federal Reserve,
17:18 you see that this can be the expected drawback
17:21 to attract investment interest to Indonesia
17:23 with a fairly high spread.
17:24 But, how about the movement of the world of business in Indonesia
17:28 with the flower tribe that was raised to 25 basis points?
17:32 Indeed, the first thing that is expected
17:36 is that the Indonesian Bank will raise the flower tribe.
17:39 Even some of my colleagues said,
17:42 "Why is it only 25 basis points?"
17:44 Not at all, 50 basis points,
17:46 so that it can really maintain stability
17:50 from our currency.
17:51 I can only make an analysis,
17:53 this is a journey, not a short term.
17:56 The fight against the extraordinary US dollar strength
18:01 cannot be only with one dose of medicine,
18:05 but maybe more than once.
18:08 So, it's like taking medicine,
18:11 but with a small dose first.
18:13 The second thing that is expected
18:17 is the attitude or response of our financial institutions,
18:21 especially the banks.
18:23 Will they be tempted to adjust their flower tickets,
18:27 both in terms of deposits and loans or credit?
18:30 In my opinion, BI, in a very good way,
18:33 is smart, it balances.
18:35 On the one hand, the policy of the flower tribe channel is indeed raised,
18:39 so the tendency is a little bit of austerity,
18:42 or the term is hawkish policy.
18:44 But the policy that is in favor of austerity
18:47 is balanced with the policy on the macro-prudential side,
18:53 where through various instruments,
18:55 there is a RIM, there is a PLM, and so on.
18:58 BI provides incentives or incentives,
19:04 or stimulus to financial service providers,
19:07 especially banks,
19:09 to still not be tempted to do credit expansion,
19:13 especially for banks and also for financing institutions, of course,
19:17 so that the loan expansion does not be tempted.
19:20 Because BI provides various incentives or stimulus
19:24 to encourage banks not only to think about the flower tribe,
19:29 but also to encourage banks to continue to expand.
19:31 Because even if it is in a hawkish way, the RIM will increase.
19:33 But if the banks in their credit activities
19:39 are in accordance with the policy corridor of BI,
19:42 then BI will provide incentives
19:44 without having to disturb or reduce the liquidity of those banks.
19:48 This is the speech or the service of our bankers
19:53 to make the most of the policy provisions provided by BI,
20:01 both through the BI RIM instrument and the macro-prudential instrument.
20:05 Maybe what needs to be spilt off
20:09 is the macro-prudential policy.
20:12 Because I see a lot of incentives
20:15 provided by the Indonesian Bank for our banks.
20:18 Okay, speaking of bank loan expansion,
20:21 and this is certainly affected by the sensitive sectors,
20:24 with the movement of the flower tribe,
20:26 when there is automotive there, property there,
20:29 does it ultimately create a position for businessmen in a number of sectors
20:34 is getting more and more narrowed
20:36 with the lack of purchasing power of the people today.
20:39 Then there is an increase in the loan flow rate.
20:43 Okay, so by comparing the possibility factors
20:48 of the flow of the flower tribe to the banking sector,
20:51 which may be the businessmen in the automotive sector
20:55 or the property sector,
20:57 whose majority of the components are raw material,
21:01 or the finishing goods,
21:04 or the half-finished goods are very dependent on imports.
21:10 So they have to recalculate or review the structure of the cost.
21:16 Because of that, with a strong dollar appreciation,
21:20 while they have to import,
21:22 of course when they have to provide the funds in rupiah,
21:26 a larger budget is needed than usual.
21:31 When the rupiah is 15,000, they may not be so stressed.
21:35 But when our rupiah weakens to 16,000,
21:40 of course the US dollar account for the rupiah becomes larger.
21:44 This is what our developers and entrepreneurs
21:49 in the automotive sector have to recalculate
21:53 so that they don't experience a loss
21:58 due to the exchange rate difference or a significant amount of foreclosures.
22:03 Meanwhile, for some of our exporters or importers
22:08 who buy foreign currency,
22:10 but they also do export activities,
22:13 maybe the pressure is not relatively big.
22:16 Because there will be a square position
22:20 where the dollar needs are converted with the US dollar receipt.
22:25 Because the transaction base is probably in the US dollar.
22:28 This is what we know as natural hedging.
22:31 But not all corporations use that instrument.
22:35 Therefore, private entrepreneurs
22:38 and those from state-owned enterprises,
22:41 have to face this situation.
22:43 Even if it's necessary, depending on the high import component,
22:47 maybe they have to do some kind of value protection or hedging.
22:51 So that the potential loss can be mitigated,
22:57 can be suppressed as little as possible.
23:00 Okay. And this is from the weakness of the rupiah value
23:02 that happened when you just entered the first quarter.
23:06 Are you ready with the business plan that they have done?
23:09 What strategy do they have to do?
23:12 So that the pressure does not take up a position,
23:15 they have to stop and hold on to the expansion.
23:18 In short, sir.
23:19 Yes. I think, both in the financial sector and the yield sector,
23:24 with this really uncontrollable situation,
23:27 because of the global factor,
23:29 maybe they have to review their business plan again this year.
23:33 Because the assumptions are relatively dramatic.
23:38 For example, in our OPM assumption, if I'm not mistaken,
23:42 the 1 dollar assumption is equivalent to 15,000.
23:46 On average, in one year.
23:48 But the question is, will that happen?
23:52 With the current position,
23:54 our rupiah depreciation is almost 5.5%.
24:01 Of course, there must be a recalculation of the business plan.
24:04 So that the target is really precise.
24:09 This is important.
24:10 That's why the assessment is about the development of the leading economic indicator,
24:16 both in Indonesia and globally.
24:18 Okay. That's it.
24:19 Related to the condition of the BIR rate,
24:22 when it rises to 6.25%, it seems that a lot of adjustments need to be made.
24:25 Both by the government, collaboration,
24:28 the implementation of fiscal monetary policy,
24:30 and then also for the business world in Indonesia.
24:32 Thank you very much, Farian, for your time and analysis.
24:35 You're welcome, sir. Thank you.
24:36 Good luck with your activities. Stay healthy, Farian.
24:39 Viewers, don't leave your seat.
24:42 Because we'll be back with another interesting topic,
24:45 where the business world and the establishment of Prabowo Gibraltar as the winner.
24:50 [Music]
25:03 [Music]

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