OPEC will cut production, S&P 500 turns green

After experiencing declines for 3 consecutive weeks, the United States S&P 500 market finally closed green, experiencing an increase of 0.8% throughout last week. This increase was assisted by a positive catalyst in the energy sector, where oil prices increased by 15% after OPEC+ countries stated they would reduce their oil production. The energy sector experienced an increase of +13.86% throughout last week.

Indonesia's PMI Manufacturing Index increased thanks to improved purchasing activity

In terms of the domestic economy, Indonesia's inflation was recorded at 5.95% y-y (previously: 4.69% y-y), driven by an increase in subsidized fuel prices, while core inflation was recorded at 3.21% y-y (previously: 3.04% y-y) , while the Indonesian Manufacturing PMI Index was recorded at 53.7 in September, up from 51.7 in August due to improving demand side as growth indicators such as employment and purchasing activity improved.

Indonesia's foreign exchange reserves in September

Indonesia's foreign exchange reserves in September reached USD 130.8 billion, down from USD 132.2 billion in August. This decline in foreign exchange reserves occurred due to government foreign debt payments and efforts to stabilize the Rupiah. The current position of foreign exchange reserves is equivalent to 5.9 months of imports or 45.7 months of imports and foreign debt payments. Foreign exchange reserves are assets held in reserve by the central bank in the form of foreign currency. Some of the functions of foreign exchange reserves are to pay government foreign debt and maintain the rupiah exchange rate.

Key Takeaways:

The increase in oil prices occurred because OPEC cut production by 15%, this had an impact on the performance of the S&P500 which finally closed in the green zone after experiencing a decline for the previous 3 weeks.

On the domestic economic side, Indonesia's Manufacturing PMI managed to rise in September to 53.7, up from August's position of 51.7 due to improvements in growth, such as employment and purchasing activity. Indonesia's foreign exchange reserves in September fell from August from USD 132.2 billion to USD 130.8 billion. This decline in foreign exchange reserves occurred due to government foreign debt payments and efforts to stabilize the Rupiah. The current position of foreign exchange reserves is equivalent to 5.9 months of imports or 45.7 months of imports and foreign debt payments.

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