Government of Indonesia Cuts The Interest Rate

Bank Indonesia the authority of monetary policy on January 7, 2009 cut the BI Rate 50 basis points from 9.25% to 8.75%. The decreasing of interest rate is based on the prediction of the inflation rate on 2009. The inflation rate on 2009 is predicted around 7%. The lower interest rate will gave positive impact to the investment in real sector specially in manufacturing sector. The increasing in investment on manufacturing sector will give positive stimulus to the Indonesia economics.

The Impact of Financial Crisis Capital Market

The impact of financial crisis in US to several capital markets around the world are shown in table below

Capital Markets	2007		2008
	Jan 2 – Dec 31	Jan 2 – Nov 30	Jan 2 – Nov 30
US	6.335%	7.192%	-32.313%
UK	2.313%	1.927%	-33.174%
Jepang	-11.789%	-9.641%	-44.393%
Hongkong	36.939%	41.031%	-49.608%
China	96.659%	82.091%	-64.513%
Singapura	14.635%	15.917%	-49.943%
India	45.507%	38.881%	-55.570%
Malaysia	29.357%	25.055%	-39.670%
Indonesia	49.513%	46.382%	-54.547%

The Impact of Lehman Brothers

The bankruptcy of Lehman Brothers gave negative impact to capital markets around the world. The table below shows those impact after three weeks.

Capital Markets	Sept 15-Oct 10, 2008
US	-22.59%
UK	-24.44%
China	0.70%
Jepang	-28.71%
Taiwan	-15.23%
Hongkong	-19.15%
Korsel	-10.54%
India	-22.20%
Singapura	-20.85%
Malaysia	-9.46%
Indonesia	-15.56%
average	-17.09%