Indonesian President Susilo Bambang Yudhoyono announced to issue a presidential decree to override parliament’s approval of the controversial regional elections law. This new bill passed the House of Representatives (DPR) on Friday last week. Immediately institutions and people objected to the bill - which abolishes direct elections for regional leaders (leaving it to regional legislatures to elect mayors, district heads and governors) - as it is considered a step back for the country’s young democracy and reduces transparency.

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Incumbent Indonesian President Susilo Bambang Yudhoyono (SBY) announced on Tuesday (30/09) that he prepares a plan to undermine the new bill - accepted by Indonesia’s House of Representatives (DPR) - that blocks direct elections for regional leaders (leaving it to regional legislatures to elect mayors, district heads and governors). Many institutions and people have objected against the new bill as it is regarded a setback for the democratization process in Indonesia. SBY also immediately expressed its concern about the passing of the new bill.

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On 24 August 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic topics such as the monetary policy of Bank Indonesia, revisions to coal export regulations and franchise businesses, poverty, the telecommunication sector, Prabowo Subianto’s legal challenge, and more.

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It took about six hours for Indonesia’s Constitutional Court (Mahkamah Konstitusi) to read out the lengthy 300-page verdict in the case that was filed by defeated presidential candidate Prabowo Subianto, who claimed that the result of Indonesia’s July 2014 presidential election was invalid due to large-scale violations and fraud that allegedly occurred during the voting and counting processes. During the read out it became increasingly clear that the Constitutional Court would reject Subianto’s claims due to a lack of evidence.

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The security status in Jakarta has been raised one day ahead of the ruling of Indonesia’s Constitutional Court (Mahkamah Konstitusi) on Thursday (21/08) as the Jakarta administration anticipates public protests. The Constitutional Court will decide on defeated presidential candidate Prabowo Subianto’s claims that the election result of Indonesia’s July presidential election was influenced by massive fraud and violations (in both the voting and counting process). According to the official result Joko Widodo won with 53.15 percent of the votes.

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The Indonesian rupiah exchange rate was relatively stagnant on Friday (15/08). Based on the Bloomberg Dollar Index, the currency of Southeast Asia’s largest economy had depreciated 0.01 percent to IDR 11,680 per US dollar at 15:40 pm local Jakarta time. At the start of the day, the rupiah depreciated as market players were waiting for incumbent President Susilo Bambang Yudhoyono’s state speech ahead of the country’s Independence Day on 17 August. Afterwards, the rupiah gained in line with the performance of other Asian currencies.

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The Indonesian rupiah exchange rate appreciated 0.86 percent to IDR 11,678 per US dollar on Monday (11/08) according to the Bloomberg Dollar Index. The rupiah was supported by internal and external factors. On the internal side, the rupiah strengthened as the Constitutional Court is expected to dismiss defeated presidential candidate Prabowo Subianto’s appeal. Former army general Subianto challenged the official election result, claiming that massive violations occurred at polling stations and during the counting process.

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Today (06/08), the first session of defeated presidential candidate Prabowo Subianto’s legal challenge started. Based on data from the General Elections Commission (KPU), Indonesia’s July 2014 presidential election was won by Joko Widodo (Jokowi) with 53.15 percent to 46.85 percent of the votes. However, Subianto claims that the KPU’s outcome was influenced by fraud and other violations, leading to 50 million troubled votes in more than 200,000 Indonesian polling stations, and therefore challenges the result at the Constitutional Court.

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As is known, presidential candidate Prabowo Subianto did not accept his defeat in Indonesia’s July 2014 presidential election and pledged to challenge the election result in the country’s Constitutional Court (Mahkamah Konstitusi). In last month’s presidential race, Subianto was defeated by Joko Widodo (popularly known as Jokowi) by 53.15 percent to 46.85 percent. However, the defeated contender claims that there have been many cases of fraud or violations at the polling stations on Election Day (9 July 2014).

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On 27 July 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve political and economic topics such as the presidential election result, foreign & domestic investment realization, poverty, corporate earnings reports, the latest World Bank report, and more.

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As the market already expected that Indonesia’s benchmark interest rate (BI rate) would be kept at 7.50 percent in June 2014, the Indonesian rupiah exchange rate did not undergo any significant fluctuations on Friday’s trading day. Based on the Bloomberg Dollar Index, the currency had depreciated 0.05 percent to IDR 11,796 per US dollar by 16:25pm local Jakarta time. The US dollar had to cope with some pressures due to US retail sales (rising only +0.3 percent in May 2014) and weaker US jobless claims data.

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Just as unexpected as yesterday when the benchmark stock index of Indonesia (known as Jakarta Composite Index or IHSG) fell 1.06 percent amid positive domestic and international circumstances, the IHSG made a surprise rebound on Tuesday’s trading day. Yesterday’s fall was exorbitant and unfounded and today market participants made up for that performance by accumulating stocks that had lost value. As a result the IHSG gained 1.25 percent to 4,946.09 points on Tuesday (10/06).

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Contrary to most Asian stock indices which were positively influenced by Japan’s higher economic growth as well as rising indices on Wall Street last Friday (06/06), the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) fell considerably on Monday (09/06). Not even the appreciating Indonesian rupiah exchange rate could push the index back into the green zone. At the end of Monday’s trading day, the Jakarta Composite Index declined 1.06 percent to 4,885.08 points.

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The Indonesian rupiah exchange rate appreciated 0.25 percent to IDR 11,860 per US dollar according to the Bloomberg Dollar Index on Thursday (05/06). However, this is not expected to be the start of an appreciating trend for the currency as there are still various domestic and international factors that place pressure on the rupiah. Contrary to the Bloomberg Index, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.54 percent to IDR 11,874 against the US dollar today.

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On the last trading day of the week, the benchmark stock index of Indonesia (known as the Jakarta Composite Index of IHSG) rose 0.06 percent to the level of 4,973.06 points. Trading volume was low as investors are still carefully monitoring political and economic developments in Indonesia. Earlier in the week, political uncertainty increased when the country's second-largest political party (Golkar) decided to join the coalition that supports the Prabowo Subianto and Hatta Rajasa pair in the July presidential election.

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It had been speculated for a while, but yesterday the official declaration of Indonesia's presidential candidates and their running mates (the vice-presidential candidates) were presented. In the upcoming election, scheduled for 9 July 2014, Jakarta Governor Joko 'Jokowi' Widodo will face Prabowo Subianto, former army general and former son-in-law to president Suharto (Indonesia's second president), in a battle for the country's presidential seat. What is there to tell about this battle?

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Similar to when the market expects the release of positive companies' corporate earnings reports, the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) gained significantly at the start of today's trading day (19/05) as the market waited for the official declarations of the presidential and vice-presidential candidates that will participate in the presidential election that is scheduled for 9 July 2014. The two pairs that will compete are the Joko Widodo-Jusuf Kalla pair and the Prabowo Subianto-Hatta Rajasa pair.

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Joko Widodo, the presidential candidate of the PDI-P (Indonesia's current largest opposition party and which won the 2014 legislative election last April) may announce his running mate (the vice presidential candidate) on Wednesday (14/05). Newsportal Bisnis.com reported that Widodo, popularly known as Jokowi, hinted at this during a brief conversation between Jokowi and journalists on Monday. Names that are frequently mentioned in connection to the position of running mate of Jokowi are Jusuf Kalla and Abraham Samad.

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On Wednesday 9 April 2014, the Indonesian electorate (consisting of about 190 million people out of a total population of around 250 million) will vote for both the country's national and regional legislatures. This legislative election also bears a big influence on the presidential election that is scheduled for 9 July 2014 as a minimum of 25 percent of the popular vote in the legislative election (or 20 percent of seats in the House of Representatives, DPR) gives a party the authority to nominate a presidential candidate.

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If presidential elections were to be held today, it is probable that Prabowo Subianto would be chosen by the Indonesian electorate to become Indonesia's next president. Various surveys indicate that Prabowo, a former high military officer as well as a successful businessman, is the most popular person to replace incumbent president Susilo Bambang Yudhoyono in mid 2014 when new presidential elections will be held (which are not joined by Yudhoyono as he is finishing his second and final term as president).

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