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Rupiah at 1998 crisis level pressures reserves, foreign-denominated debt

first_imgAs of 4:59 p.m. in Jakarta on Friday, the rupiah had weakened more than 15 percent against the US dollar this year. It broke the Rp 16,000 mark during the day, a level unseen since the 1998 crisis. The benchmark stock index, the Jakarta Composite Index (JCI), has lost a third of its value this year.As of Thursday, a Rp 105.1 trillion capital outflow had been recorded this year as foreign investors dumped Rp 92.8 trillion worth of government bonds and Rp 8.3 trillion in stocks, BI data shows.“Our foreign exchange reserves are more than enough,” Perry said when asked about the impact of the market rout on the central bank’s dollar reserves. At $130.4 billion in February, Indonesia’s dollar reserves represent 7.7 months of imports, well above the 3-month international adequacy standard.Bahana Sekuritas economist Satria Sambijantoro said the potential rebound of the rupiah would depend on the government’s efforts to contain the COVID-19 pandemic. The rupiah breached Rp 16,000 against the US dollar on Friday, the weakest since the 1998 crisis, taking its toll on central bank reserves, corporate debt obligations and import-reliant industries as the COVID-19 pandemic prompts an Indonesian asset selloff.Bank Indonesia (BI) Governor Perry Warjiyo said on Friday that the central bank had spent Rp 163 trillion (US$10.1 billion) to buy government bonds in the secondary market to stabilize the rupiah as foreign investors exited the market.“The stabilization efforts that we’ve taken focus on providing a supply of dollars, which we will continue doing through intervention […],” Perry told a teleconferenced press briefing, referring to the central bank’s bond buying and intervention in spot and non-deliverable forward markets. “We think most of the rupiah’s weakness was driven by psychological – not fundamental – factors due to the ‘two-tier pricing’ in the forex market that discourages exporters and bonds investors from holding on to their rupiah-denominated assets, fearing further depreciation,” he wrote.The government has pledged to allocate Rp 120 trillion (US$7.5 billion) from the 2020 state budget to stimulate the economy, which may grow at the lowest level in 15 years, just above 4 percent, Finance Minsiter Sri Mulyani Indrawati said.State-Owned Enterprises Minister Erick Thohir said the weakening of the rupiah against the US dollar could also impact state firms’ debts, including flag carrier Garuda Indonesia.“We have been negotiating regarding the airline’s [condition] for more than a month,” Erick said in a teleconferenced press briefing on Friday. Garuda may need to restructure its foreign-denominated debts as it has struggled to pay its obligations as the pandemic hits the travel industry hard, he added.Garuda Indonesia issued US$496.8 million in global sukuk (sharia-compliant financial assets) on June 3, 2015. They are due to mature on June 3 with an annual return of 5.95 percent, according to the company’s financial report released in September of last year.For import-reliant producers, the rupiah depreciation would increase costs in a sector already hit by supply chain shocks resulting from the COVID-19 pandemic.“If manufacturers want to keep their products competitive in the market, they have to pick a factor of their costs that they can cut, which is their workforce,” said Indef Center of Industry, Trade and Investment researcher Andry Satrio Nugroho.Andry predicted that the factory activity benchmark, the IHS Markit Purchasing Manager’s Index (PMI), would fall drastically in March. The index managed to climb to expansion for the first time since June at 51.9 in February. A reading above 50 indicates expansion, and one below 50 indicates contraction.“We have to finish the virus problems first, and then industries can catch up, just like what China is doing right now,” said Andry, adding that the recent stimulus should focus on healthcare instead.Chamber of Industry and Commerce (Kadin) vice chairman for industrial affairs Johnny Darmawan said on Thursday that the depreciating rupiah would be a further drag on already sluggish business activities due to social distancing measures taken by consumers and enterprises.President Joko “Jokowi” Widodo on Sunday urged Indonesians to practice social distancing, a public health measure to slow the transmission of an infectious disease by staying 1 meter away from other people in the case of COVID-19. It involves “working from home, studying from home and praying from home”, the President said.“Production has declined because of social distancing measures to slow down the coronavirus. Business has already been lethargic,” said Johnny.Manufacturing industry players have complained about the disruption in the supply of raw materials as measures to contain COVID-19 bind factory production across Indonesia. Between 20 and 50 percent of raw materials for domestic industry are sourced from China, Indonesia’s biggest trade partner.The government previously announced two rounds of stimulus packages including a package worth Rp 22.9 trillion that includes individual and corporate tax breaks. The first package, worth Rp 10.3 trillion and announced on Feb. 25, provides for staple needs and mortgage subsidies for low-income families and fiscal incentives for travel-related businesses.Indonesia had 369 confirmed cases of COVID-19 and 32 deaths as of Friday. Globally, the pneumonia-like illness has infected over 240,000 people and has claimed at least 10,000 lives. (mpr)Topics :last_img read more

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Despite shaky past, Syracuse finishes strong, tops Loyola

first_imgIt was becoming an ugly trend. Before Syracuse hosted Loyola in the Carrier Dome Friday night, Syracuse had lost three games to ranked opponents by just a goal apiece. With SU trailing the Greyhounds in the second half, it appeared as if the Orange was in for another disappointing finish.But on this night there was a different feel down the stretch.The No. 10 Orange (9-4, 4-1 Big East) was able to stand its ground on Friday, defeating No. 13 Loyola, 13-11, in front of 412 fans at the Carrier Dome. Though SU dismantled Villanova (7-6, 0-5) Sunday, 18-3, the real challenge of the weekend came on Friday night. Coming off a heartbreaking one-goal loss to No. 11 Notre Dame last Sunday, Syracuse needed to prove to itself that it could defeat a fellow Big East power, especially in a tight contest.‘I think we came in today knowing that we had to come away with a win,’ senior attack Halley Quillinan said. ‘We knew that we were going to face a strong Big East team looking to come in here and upset us in the Dome. At the end, we kept our composure,’ The Orange came out of the gate with a vengeance, scoring three quick goals in the first eight minutes to take an early lead. Loyola responded with three goals of its own before senior midfielder Christina Dove gave the Orange a lead with her first goal of the game. The Greyhounds scored three of the last four goals in the half to take a 6-5 lead into the break.AdvertisementThis is placeholder textSU had been here before. Deadlocked in tight games against quality opponents, the Orange has found itself on the short side of the stick more often than not this season. On Feb. 27 SU fell to No. 4 Virginia, 14-13. Then on March 21 the Orange was narrowly denied what would have been a monumental upset, losing to No. 1 Northwestern, 13-12. And then there’s the Notre Dame game, which proved especially damaging considering that it came at the hands of a Big East opponent.Syracuse knew that it couldn’t let another close one slip away.The second half didn’t begin as the Orange would have liked, as Loyola scored a little more than two minutes in for a two-goal lead, the Greyhounds’ largest of the evening. But about seven minutes into the half, the momentum began to turn.The Orange was outshot 18-8 in the first half as its offense rarely had the ball in its own territory. But suddenly Syracuse began to play a quicker game, moving the ball effectively and giving itself ample opportunities to score. After numerous missed shots, freshman attack Tegan Brown broke the ice with a free-position goal at the 20:29 mark.‘I think we just got our composure and our confidence back,’ Brown said. ‘We brought it together. We started talking and communicating again and decided to go at full pace.’Following Brown’s goal, the Orange began to wake up. SU scored three of the next five goals before freshman attack Michelle Tumolo scored what would be the eventual game-winner on a picture-perfect pass off a fast break.The Carrier Dome crowd erupted louder than it had all season, and the Orange never looked back en route to a victory.‘I think we were in a bit of a funk coming off the Notre Dame game,’ head coach Gary Gait said. ‘And I think they had a little bit of self-doubt. We just had to play the game, and instead of stopping to make passes and cutting at three-quarters speed, they decided to go at full speed.’Though Syracuse has not had a wealth of success in close games thus far, Quillinan admits that she enjoys when the games are tight. She believes that it brings out the best of her ability and gives her team a chip on its shoulder.Luckily for the Orange, that chip finally resulted in a win.‘I like close games,’ Quillinan said. ‘I like a battle. I like being competitive. I like walking in knowing that the other team is ready for a fight. To see the fire in some of my teammates’ eyes — like Michelle (Tumolo) and (freshman midfielder) Bridget Daley — that just makes me better and pushes me harder.’bckallet@syr.edu Published on April 18, 2010 at 12:00 pm Commentscenter_img Facebook Twitter Google+last_img read more

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