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Reuters
4 days ago
- Business
- Reuters
Indonesia clinches US trade deal, says Trump was a 'tough negotiator'
JAKARTA, July 16 (Reuters) - Indonesia's president said U.S. counterpart Donald Trump was a "tough negotiator" after the two countries reached a trade deal that led to a reduction of proposed tariff rates to 19% from 32%. The deal is among only a handful reached so far by the Trump administration ahead of an August 1 deadline for negotiations, but no details were immediately provided by Indonesia, Southeast Asia's largest economy and a member of the G20. Trump said Indonesia had committed to purchasing 50 Boeing (BA.N), opens new tab jets, $15 billion in U.S. energy supplies, and $4.5 billion in U.S. agricultural products. "We've agreed from 32%, if I'm not mistaken, lowered to 19% ... I was still negotiating, but, I must say, he's a pretty tough negotiator," Indonesia President Prabowo Subianto told journalists on Wednesday after a phone call with Trump. Prabowo, who was returning from overseas visits, including Brazil for the BRICS conference, said he had spoken to Trump. He added, while he understood the United States' points of view in the talks: "We've given our offer, we cannot give more." Trump's comments outlined an Indonesia deal similar to a preliminary pact struck recently with Vietnam, with no levies on U.S. exports to Indonesia. It also included a penalty rate for so-called transshipments of goods from China via Indonesia. Indonesia - the world's fourth-largest country by population - ran a goods trade surplus of $17.9 billion with the United States in 2024, according to the U.S. Trade Representative. "This is an extraordinary struggle by our negotiating team led by the Coordinating Minister for Economic Affairs," Hasan Nasbi, the Indonesian president's spokesperson, told reporters earlier. Nasbi said Indonesia's tariff rate was much lower than other countries in Southeast Asia. The Jakarta stock index (.JKSE), opens new tab rose as much as 0.8% on Wednesday after the deal, which Indonesia's central bank said would provide a positive catalyst for economic activities. The JKSE is up 10% since early April. The country's central bank cut rates on Wednesday, saying the deal will have a positive impact on the archipelago's exports and economic growth, and provide certainty to financial markets. A report by Capital Economics said that the rate cut might have come anyway, but the trade deal helped by removing a key source of uncertainty. "While details are still sparse, it appears to be similar to that agreed with Vietnam, with clamping down on re-routing from China, once again, a key target," the report said. Natixis warned the Indonesian economy would still be affected by Trump's tariffs on China - Indonesia's biggest trade partner. "Well, 19% is better than 32%," Matt Simpson, a senior market analyst at City Index in Brisbane, said. "Indonesian non-oil exports such as footwear and textiles will take a hit, but energy and agriculture are set to gain. Officials are of course pleased because they're in Trump's good books," he added. Myrdal Gunarto, an economist with Maybank Indonesia, described the deal as relatively good, as Jakarta is getting a tariff below those imposed on other Southeast Asian neighbours. "(It) opens more space for domestic lower monetary policy rate," he said, predicting it would also trigger capital inflows.
Reuters
4 days ago
- Business
- Reuters
Indonesia central bank cuts benchmark rate, welcomes US tariff deal
JAKARTA, July 16 (Reuters) - Indonesia's central bank cut rates on Wednesday for the fourth time since September and said a revised tariff deal with the United States was positive for Southeast Asia's biggest economy amid weakening global trade and slowing domestic demand. Bank Indonesia (BI) cut the benchmark 7-day reverse repurchase rate (IDCBRR=ECI), opens new tab by 25 basis points to 5.25%, as expected by a slim majority of economists polled by Reuters, and also cut two other key rates. Governor Perry Warjiyo said the central bank would continue to observe room for more rate cuts, citing an expectation of low inflation through to 2026, a stable rupiah and bleak global economic outlook. "BI is already all out in boosting economic growth, including in supporting loan growth," the governor told a press conference. President Donald Trump's announcement of a tariff deal on Tuesday gave BI another reason to ease monetary policy, some analysts said. "External caution was counterbalanced by the fresh news over the trade deal," DBS Bank senior economist Radhika Rao said. "Policymakers have been opportunistic this year, prudently tapping periods of market stability to lower rates, with the latest move also coming against the backdrop of the successful completion of a trade deal with the U.S." The central bank welcomed the trade deal, where Indonesian exports would incur a 19% tariff instead of the 32% rate initially proposed by Washington, Warjiyo said. The deal was a positive development that would support exports and broader economic prospects as the central bank maintained its GDP growth forecast for 2025 at a range of 4.6% to 5.4%, he said. Warjiyo expressed optimism about Indonesia's export outlook after the revised U.S. tariff deal. "This deal will of course increase imports, but in our view, these are imports for productive purposes, which will in turn increase economic growth going forward," he said, adding certainty from the decision will also help with business decision making and prospects for capital inflows. Sluggish household spending saw Indonesia's growth weaken in the first quarter, while the outlook for subsequent quarters has been clouded by the impact of U.S. tariffs on global trade. In its easing cycle since September, BI had taken pauses in between rate cuts to try to head off volatility in the rupiah triggered by Trump's trade policies and geopolitical tensions, even as Indonesia's inflation remained muted. The rupiah , which has been rangebound so far this month, barely moved after BI's announcement, while the main stock index (.JKSE), opens new tab extended gains to trade almost 1% up. Brokerage Mandiri Sekuritas expects another 25-bp cut this year and 50-bp more in the first quarter of 2026 to counter weakening economic activity, its economist Rangga Cipta said. "BI maintained a dovish tone, emphasising the need to support economic growth," he said.
GMA Network
4 days ago
- Business
- GMA Network
Indonesia says US trade deal reached after ‘extraordinary struggle'
A container truck is unloaded from a truck at Tanjung Priok Port in North Jakarta, Indonesia, July 8, 2025. REUTERS/ Ajeng Dinar Ulfiana JAKARTA — Indonesia said on Wednesday it had reached a trade deal with the United States after an "extraordinary struggle" in negotiations which resulted in a reduction of proposed US tariff rates on the Southeast Asian country's exports to 19% from 32%. US President Donald Trump said on Tuesday a deal had been struck after he spoke to Indonesian President Prabowo Subianto. The deal is among only a handful reached so far by the Trump administration ahead of an August 1 deadline for negotiations. "This is an extraordinary struggle by our negotiating team led by the Coordinating Minister for Economic Affairs," Hasan Nasbi, the Indonesian president's spokesperson, told reporters on Wednesday. Nasbi said Prabowo had also negotiated directly with Trump over the phone, without giving further details. He said Prabowo would hold a press conference later on Wednesday after returning from a foreign trip. Prabowo later said that his government understood the interests of the United States in trade talks, and that the two countries will continue to negotiate even after reaching the deal: "We've given our offer, we cannot give more." Indonesia—the world's fourth-largest country by population and a member of G20—ran a goods trade surplus of $17.9 billion with the United States in 2024, according to the US Trade Representative. Nasbi called the deal a "meeting point" between the two governments, and said Indonesia's tariff rate was much lower than other countries in Southeast Asia. Indonesia, Southeast Asia's largest economy, has committed to purchasing 50 Boeing jets, $15 billion in US energy, and $4.5 billion in US agricultural products as part of its trade agreement with the United States, Trump said. Trump outlined an Indonesia deal similar to a preliminary pact struck recently with Vietnam, with no levies on US exports to Indonesia. It also included a penalty rate for so-called transshipments of goods from China via Indonesia. The Jakarta stock index rose as much as 0.8% on Wednesday after the deal, which Indonesia's central bank said would provide a positive catalyst for economic activities. The JKSE is up 10% since early April. Bank Indonesia, which cut rates on Wednesday, said the deal will have a positive impact on the archipelago's exports and economic growth, and provide certainty to financial markets. "Well, 19% is better than 32%," Matt Simpson, a senior market analyst at City Index in Brisbane, said. "Indonesian non-oil exports such as footwear and textiles will take a hit, but energy and agriculture are set to gain. Officials are of course pleased because they're in Trump's good books," he added. Natixis warned the Indonesian economy would still be affected by Trump's tariffs on China—Indonesia's biggest trade partner. Myrdal Gunarto, an economist with Maybank Indonesia, described the deal as relatively good, as Jakarta is getting a tariff below those imposed on other Southeast Asian neighbors. "[The deal] opens more space for domestic lower monetary policy rate," he said, predicting it would also trigger capital inflows. A bare majority of analysts in a Reuters poll expected Indonesia's central bank to cut interest rates later on Wednesday to bolster economic growth. — Reuters
Reuters
11-04-2025
- Business
- Reuters
Indonesia's $48 billion social security fund eyes doubling equities exposure
JAKARTA, April 11 (Reuters) - Indonesia's $48 billion social security fund BPJS Ketenagakerjaan, the country's largest institutional investor, aims to boost the share of local equities in its portfolio to up to 20% within three years, with a recent market crash creating room to invest in undervalued shares, a top official told Reuters on Friday. Edwin Ridwan, the agency's director of investment development, said that since the Indonesian market slump, the state-owned fund has been increasing its investment gradually in stocks with big market capitalisation. "These are the conditions where people are selling, if we look at history ... whenever the market overshoots, people are selling, it's the best time to buy," he said in an interview, referring to financial crises of 1998 and 2008 and the COVID-19 pandemic. "The window has started to open up for us to increase our exposure to equities, because we need volume, we need liquidity, and with everybody selling, that liquidity is being provided." BPJS Ketenagakerjaan currently has about $4.8 billion of assets under its management directly in the stock market or through mutual funds, the company said. The largest portion is invested in bonds, and the rest in deposits and other instruments. Indonesia's stock market (.JKSE), opens new tab tanked when it reopened on Tuesday after an extended holiday break, triggering a 30-minute trading halt in response to global turmoil over steep U.S. trade tariffs announced days earlier. The market has since regained some of its losses. ($1 = 16,790.0000 rupiah)
Reuters
08-04-2025
- Business
- Reuters
Indonesia stock exchange says 20% fall would see trade suspended for day
JAKARTA, April 8 (Reuters) - The Indonesian Stock Exchange said a market fall of more than 20% would cause trading to be suspended for the rest of the day, as the market resumes trading on Tuesday after an extended holiday break amid turmoil on global markets. The previous trigger level was a move of 15%. The stock exchange said an initial 30-minute trading halt would be triggered by moves of 8%, changed from the previous 5%. Trade would be halted again for another 30 minutes if the main index (.JKSE), opens new tab fell more than 15%, changed from 10%. The stock exchange said in a statement the changes were to ensure liquidity and give investors time to process information. The stock exchange also said a 15% fall in an individual stock would trigger its auto-rejection rule, where sell orders for the stock would be rejected. Markets resume trade on Tuesday for first time since the close on March 27, and will have to digest the global market turmoil following the U.S. tariff announcement last week. Ahead of the holidays, Indonesian markets were already under pressure. The rupiah is close to its lowest levels since the 1998 financial crisis and the main stock index hit an 18-month low in March.
