December 2015 3rd Week

28 december 2015

Categories : IR Weekly Review


  • MACRO
      • Central Bank of the United States (US) or The Federal Reserve (Fed) finally has risen the interest rates (Fed rate), which is expected to solve the crisis after seven years. In the Board of Fed Policy’s meeting, the Federal Open Market Committee (FOMC) which was held on December, 15-16th 2015, decided to raise the benchmark of the US interest rate to 0.25% -0.50% from the previous interest rate 0% -0.25%. Interest rate rose for the first time after almost 10 years. The Fed believed the US economy has improved since the financial crisis of 2007-2009. However, by the increase of the interest rate, it would solve the debate which has been started since the end of last year. They believe this decision is correct. "The recovery of the US economy is in progress. As the economy continues to improve, we believe this interest rate increase is very appropriate," Fed Governor Janet Yellen cited by Reuters on Thursday, December 17th, 2015.
      • China’s economy is expected going lower in the next year. Chinese Information Center expects the probability of PDB growth next year is only 6.5%. In the last five years, the China’s economy drops to 7.5%. Chinese State Information Center noted, in the third quarter of 2015, Chinese economy was able to grow only 6.9%. It was the lowest growth since the global economic crisis in the first quarter of 2009. Even though China's economic is growing slower, but China is still optimistic with their economic condition if only the government restructures the economic conditions. According to China's State Information Center, there are some opportunities to expand domestic demand, considering the great potential of market.
      • Reviews :
        If Yuan is actually announced as the world's new reserve currency, then practically the large institutions around the world which hold assets denominated in USD, Euro, Pound Sterling and Yen, will begin to convert into Yuan. The value of Yuan will appreciate significantly, while the value of USD and the three other currencies may drop.
  • MICRO
      • Board of Governors of Bank Indonesia’s meeting (RDG-BI) on December 17th, 2015 decided to maintain the benchmark of interest rate (BI Rate) at the level of 7.50%, with Deposit Facility interest rate of 5.50% and Lending Facility at the level of 8.00%, Executive Director of the Department of Communications BI, Tirta Segara delivered, this decision was according to the inflation forecast in 2015 which stayed at the lower limit of the range 4 ± 1% followed by current account deficit which is estimated in the range of 2% of GDP in 2015. "Economic growth will be improved especially supported by the increasing of government capital expenditure, although economic activity in the private sector is still going relatively slow, "said Tirta in BI Building, Thursday, December 17th, 2015.
      • Deposit Insurance Corporation (LPS) has evaluated the guaranteed interest rate for deposits denominated in IDR and foreign exchange (forex) in commercial banks for deposits in IDR in BPR. Rate Guarantee Level for the period October 8th, 2015 until January 14th, 2016 has not changed. The interest rate guarantee in IDR in commercial banks is 7.50%, while in foreign currency is 1.25% and the interest rate guarantee in IDR in BPR is 10%. "The level of rate guarantee still corresponds with the latest developments in the economic condition and banking," said Secretary of LPS Samsu Adi Nugroho in a statement in Jakarta, Friday, December 18th, 2015. According to the aim to protect customers and expanded the scope of interest rate guarantee, LPS urged banks can pay attention to the provisions of guaranteed interest rate of deposits in order to raise fund.
      • Reviews :
        In facing the problems of the economic degradation, the government should implement the fiscal policy and monetary policy at the same time as economic activity including the household sector, the corporate sector, the government sector and the international sector / overseas are mutually affected each other.
  • BANKING
      • PT Bank Mandiri (Persero) Tbk (BMRI) stated that they received funds IDR 25 trillion from the reassessment of assets or revaluation of fixed assets. "From the results of the self-assessment (unilaterally) that will be confirmed by the professional KJPP (Office of Public Appraisal Service)," said Mandiri corporate secretary, Rohas Hafas in Jakarta, Friday (18/12/2015). He also stated that the company received final tax facilities 3% of the increase of the asset. As stipulated in the regulations of the Minister of Finance Regulation 191 / PMK.10 / 2015 on Revaluation of Assets to taxation for petition in 2015. "We have been deposited Rp 690 billion to the Tax Directorate the final tax of 3% of the revaluation asset deviation," he added. According to Rohan, later the addition of the value assets will be counted as a capital gain and will be included in core capital tier 1. The result will improve the capital adequacy ratio or CAR 20%. Therefore, BMRI stated they ready to implement the Basel III in 2016. "Without additional PMN (State Capital) we are ready to implement Basel III," he said.
      • PT Bank Tabungan Negara  (Persero) Tbk (BBTN) in 2016, targets the number of accounts (NOA) Simpanan Pelajar (students saving/ SimPel / SimPel iB) will be able to get one million customers. It was stated by the Director of BTN, Sis Apik Wijayanto, in a written statement in Jakarta, Thursday (17/12/2015). He said the savings were expected to revive the culture of saving among the students. Besides supporting the Financial Services Authority (OJK in Indonesia)  in the development of saving products which refers especially for the students also National Savings Movement. "It will also strengthen the saving product of bank BTN especially for students," he said. Since the program was launched, until now has 410 more schools were cooperated with Bank BTN, where the number of NOA and the cooperation have reached 517 000 accounts.
      • Reviews :
        In the process of Indonesia’s economic recovery, the SME sector has strategic and important roles that can be viewed from various aspects, because of the large number of industry and  available in every economy sectors. The synergy between Banks and SME’s should be further improved to achieve the development together.

Disclaimer : This document is for informational purposes only and obtained from a variety of reliable sources, but is not a guarantee the accuracy or completeness and should not be relied on completely. The above conditions may be changed at any time. Forbidden to rewrite anything without written permission from The East Java Regional Development Banks