BOJ Signals More Rate Hikes as Inflation Risks Rise Amid Energy Price Pressures 
Trump Says No Hormuz Strait Tolls During 60-Day Iran Ceasefire 
Oil Prices Slide as U.S.-Iran Deal and Hormuz Reopening Ease Supply Concerns 
Canada Imposes 10% Tariff on Canned Vegetable Imports to Protect Domestic Industry 
US Stock Futures Slip After Wall Street Rally Fueled by US-Iran Deal and Chipmaker Surge 
Best Gold Stocks to Buy Now: AABB, GOLD, GDX 
Dollar Surges After Fed Holds Rates Steady, Signals Potential Tightening Ahead 
Dollar Hits One-Month High as Hawkish Fed Outlook Boosts Greenback 
Current account deficit of Indonesia narrowed during the third quarter of this year, matching the lowest level seen since the second quarter of 2012. Further, the recovery in rupiah volatility has also grabbed a considerable amount of attention.
Current account (C/A) deficit narrowed to 1.8 percent of GDP in 3Q16. This matches the lowest amount of C/A deficit seen since 2Q12 (C/A deficit was also at 1.8 percent of GDP in 3Q15). The merchandise trade data is likely to continue recording positive monthly balances till the year-end (Oct trade data due on Tuesday), making it all but certain that C/A deficit will come in around 2 percent of GDP this year, DBS reported.
However, the 3Q16 balance of payments (BoP) data showed net foreign direct investment (FDI) surging to 2.1 percent of GDP in the period. This means that net FDI can finance the entire amount of C/A deficit, for the first time since 2011.
Back in mid-2013, Indonesia’s C/A deficit at 3.5 percent of GDP was unsustainable as only half of it was covered by net FDI. When the taper tantrums erupted then, Indonesia was among the worst hit economies.
