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Rabu, 22 Juni 2011

Economy: Greece debt crisis hurts sentiment on the rupiah - Mandiri

Market review
§ Emerging market currencies and stock market weakened on uncertainty over Greece’s debt bailout extension and weak US economic figures. The rupiah weakened to Rp8,608/US$ (1.0% wow) and stock market index fell to 3,722 (1.7% wow).

Global economic update
· Series of weak US statistics released last week indicated that the economy is loosening its momentum.
· Rejection of austerity plan by Greek parliament and dispute among the creditors particularly on the need of private sector involvement have worsened uncertainty over the country’s debt bailout extension.
· Despite slowing economic growth momentum in China, inflation continued to tick higher by 5.5% yoy in May11, prompting further policy tightening by the central bank.

Domestic economic update
· Banks credit growth eased to 24% in May, while NPL was flat. No significant decline in interest rate after the implementation of base lending rate publication.
· Government debt increased Rp39.7tn in 5M11 to Rp1,716tn, yet debt to GDP continued to fall to 25.7%.

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