Sri Mulyani hopes that the Fed's interest rate cut can lift investors' confidence to invest in Indonesia. (CNN Indonesia / Adhi Wicaksono).

The Fed Interest Rate Decreases, Investment in Indonesia Will Gain Great Momentum

Jakarta, Indonesia - It is reported that United States (US) central bank The Federal Reserve (The Fed) has cut its benchmark Fed Fund Rate by 25 basis points. The Joint Composite Index closed down slightly with the Composite Stock Price Index (CSPI) fell 8.96 points or 0.14% to 6,381.54. According to the source, this first cut since 2008 was carried out by considering concerns about the global economy and US inflation.

Indonesia Finance Minister, Sri Mulyani Indrawati hopes that the decline in the benchmark interest rate of the US central bank The Federal Reserves (The Fed) could lift investors' optimism to invest their capital in Indonesia, both in the form of portfolio investment and the real sector, and even do partnerships in Indonesia.

Sri Mulyani hopes that through this decline, the credit distribution can take place so that the real sector can also expand. This can overcome the performance of the slow-growing manufacturing industry these days, which she calls an impact of high interest rates previously.

She also said that the performance of companies in certain sectors had experienced pressures due to conditions last year, such as rising interest rates, rising rupiah exchange rates and weakening exports. She hopes that this huge momentum can be more positive in the third quarter for Indonesia's economy condition.

However, according to the data from the second quarter Central Statistics Agency (BPS) shows that the Large and Medium Industries (IBS) grew 3.62 percent or slowed growth compared to the previous quarter of 4.45 percent or the second quarter of last year which was 4.36 percent. From these data, the industries that experienced the most stock decline were the motor vehicle industry at 7.91 percent, the rubber industry at 9.56 percent, and the metal industry at 17.44 percent and hopefully through the this new policy, the investments in those industries can increase as soon as possible this year.

Source: https://www.cnnindonesia.com/ekonomi/20190801190308-532-417525/bunga-the-fed-turun-sri-mulyani-harap-investasi-mekar