Don't get your Hopes too High

October is the time when most Indonesian companies strategize their next year's business plan. Unfortunately, this month's planning exercise will be tougher to call, compared to past years. This year, the trend of economic indicators, notably growth, interest and the rupiah, which a company uses to project its revenue, has been especially hard to pin down. The rupiah has dropped nearly 10 percent to a low of Rp14,700 per US dollar, before strengthening to the Rp13,500 level, last week.

Last week's announcement of the government's fourth set of economic packages, no doubt, has helped lift the pressure off the rupiah. But one must note that the USD weakened substantially against most major currencies, due to weak economic data and rising expectations of a further delay in the US Federal Reserve's USD interest rate hike, which was scheduled by the year-end.

October 20, 2015