Indonesia

Indonesia reached a 5-month high despite 8% slip in May retail sales growth.

Government projects fuel subsidy to swell to $23.1b, raising concerns on deficit target.

An adjustment in BI's interest rate might not be necessary with a projected inflation of 5% yoy.

Commodity prices falling to 17-27% in May is bad news.

The pressure came as food and process food prices as well as housing cost all rose faster than they did in May.

Sharply lower oil prices over the past several weeks will keep a lid on overall price pressures, says DBS.

Higher inflationary pressures, however, may be seen ahead of the Ramadan fasting month.

Merchandise trade balance has been narrowing on the back of Indonesia’s robust domestic demand but unfavorable commodity prices have exacerbated the issue, says DBS.

But approval will be selective, according to the Deputy Governor of Bank Indonesia, Muliaman Hadad.

New ruling on mineral ore exports on top of a 20% tax has led to severe declines in the industry.

The rupiah is currently the worst performing currency in SE Asia having depreciated by 4% against the US dollar.

Its April trade balance dipped into a $641bn deficit and could put the country's funding flows in a bind.

The sudden shift in the central bank's position came in response to the worsening Eurozone debt crisis.

Bank Indonesia is introducing foreign currency-denominated term deposits to stabilize the rupiah which had declined by 3.9% year-to-date.

But this should be viewed positively as it translated to a 0.7% qoq seasonally adjusted increase, says OCBC.

Reforms in fuel and electricity subsidies could free up funds for a much needed investment in physical and human capital.