ECONOMIC_UPDATE 9-Sep-11

SUMMARY

Global Economy


Non-farm payrolls in the United States stagnated at 131.13 million last month, the Labor Department said last week. Jobless rate thus stood at 9.1%, the same as in July 2011.

The Swiss National Bank won’t tolerate franc exchange rate below the minimum rate of CHF 1.2 per euro, saying it will buy foreign currency in unlimited quantity.

Central banks of Australia and South Korea this week retained their policy rates, recognizing that uncertainty has elevated given current global economic condition. The key rates remained at 4.75% and 3.25%, respectively.


Indonesia Economy


Bank Indonesia expectedly retained the BI rate at 6.75% yesterday, considering higher uncertainty in global financial system and lower inflation forecasts. The central bank also opted to lower the limit of interbank lending rate from 100 bps below the reference rate to 150 bps to spur transactions in the money market.

The Global Competitiveness Report 2011–2012 published by the World Economic Forum highlighted Indonesia’s competitiveness score at 4.4, the same as in previous year. Its rank nonetheless changed to 46 (out of 142 economies) from 44 (out of 139) in the same period.

Indonesian government is set to introduce new regulation to restrict corporates foreign-currency debt. The initiative came into sight as the authority seeks to minimize exchange rate, maturity, and interest rate risks.

Consumer prices advanced 0.93% in August 2011 from previous month, notably supported by Eid-related spending. Year-on-year inflation thus rose to 4.79%, the first increase in seven months.

Exports dropped 5.23% in July 2011 from prior month as demand from several trading partners eased. Imports concurrently upped 6.57%. These led to the slippage of the trade surplus to US$ 1.36 billion from US$ 3.31 billion in June.

Consumer confidence index slipped to 110.6 in August 2011 from 118.8 in prior month as households downgraded their perceptions on income and employment. Meanwhile, retail sales grew 6.9% monthly (22.9% annually) in July 2011.