Samuel

Daily Economic Report

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Global News

  • The People’s Bank of China (PBoC) decided to hold its benchmark interest rates for corporate and household loans for the tenth straight month, as the economy continues to recover from the COVID-19 crisis. The one-year loan prime rate (LPR) was maintained at 3.85%, while the five-year remained at 4.65%. (Trading Economics)
  • The Chicago Fed National Activity Index in the US increased to 0.66 in January 2021 (Dec-20: 0.41). The reading indicated the strongest activity growth in three months, supported by improvements in personal consumption-related indicators (+0.35, prev: -0.06). Meanwhile, production-related indicators contributed +0.28, lower than its contribution in December (+0.37). (Trading Economics)

Domestic News

  • As many as 16,297 people received their first dose of COVID-19 vaccination on Monday (22/2). With this addition, the total number of people who have received the first dose of COVID-19 vaccination in Indonesia has reached 1,244,215. (Kontan)
  • The National Economic Recovery Program (PEN) budget for this year has been increased to IDR 553.1 trillion. This figure is close to last year’s realization (IDR 579.8 trillion). (Bisnis Indonesia)
  • BI is optimistic that the relaxation of down payments for housing and automotive loans will boost demand for consumption credit by +0.5%. (Kontan)
  • The government decided to increase health-care spending quite significantly this year, from IDR 169.7 trillion to IDR 254 trillion. Meanwhile, education spending remained at IDR 550 trillion.(Kontan)

We estimate that the rupiah exchange rate will be stable ahead of today’s SBSN auction. The improvement in US economic data is expected to boost UST yield and limit the movement of rupiah this week. The Chicago Fed National Activity Index (CFNAI) shows that US domestic consumption is getting better. Meanwhile, ahead of today’s SBSN auction, we predict that foreign capital flows into the Indonesian bond market will increase, which in turn will help strengthen rupiah. Meanwhile, market players are still waiting for the release of Indonesia Money Supply M2 data for January 2021, which is estimated to increase by +13% yoy (January: +12.4% yoy). We expect JISDOR exchange rate to be stable today at IDR 14,100/USD.

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