Today's Headlines in Indonesia

The Today's Headlines section of Indonesia Investments is a regularly updated section which contains the latest information with regard to topics that are currently causing headlines in Indonesia's media. Most of our headlines cover political, economic and social matters. As a consequence of their recent nature, these topics may not have crystallized fully yet and can, therefore, lack a profound analysis. For publications with a more in-depth understanding of subjects, we refer you to our News, Financial or Business columns.

  • Indonesia Introduces Tighter Regulations Regarding Tax Deductible Interest Payments

    Starting per 1 January 2016, Indonesian companies’ interest payments to lenders are no longer considered tax deductible in case the company’s debt amounts to over four times its equity. Indonesian Finance Minister Bambang Brodjonegoro said such a tighter regulation regarding corporate debt financing will make it less attractive for local companies to accumulate debt, while strengthening the company's equity structure.

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  • Fed Fund Rate Hike Delay: What is the Impact on Indonesian Stocks & Rupiah?

    After the Federal Reserve announced that it kept its key interest rate at the historically low level of 0.0-0.25 percent at the September policy meeting, most of Asia’s emerging market stocks were up on relief that their currencies are not to depreciate heavily (yet) due to the looming rate hike. Yesterday (17/09), the US central bank said it postponed further monetary tightening due to weakness in the global economy, unsettled financial markets, and low US inflation. However, a Fed Fund Rate hike is still likely to occur before the year-end.

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  • Economic Policy Package: Indonesian Government to Revise Luxury Tax for Houses

    In line with the recently unveiled economic policy package, Indonesian Finance Minister Bambang Brodjonegoro said that the government plans to revise its luxury tax policy for houses. Currently, houses worth over IDR 2 billion (approx. USD $140,000) are subject to a 20 percent luxury tax. The government now plans to raise this threshold to IDR 10 billion (approx. USD $700,000). Indonesia’s luxury tax was introduced in Suharto’s New Order regime in an effort to curtail inequality within Indonesia’s society.

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  • Bank Indonesia Leaves Interest Rates Unchanged to Support Rupiah, Combat Inflation

    In line with expectation, the central bank of Indonesia (Bank Indonesia) decided to keep its key interest rate (BI rate) at 7.50 percent for a seven consecutive month in September’s Board of Governor’s meeting (17/09) as it aims to stabilize the rupiah amid global volatility caused by looming higher US interest rates and China’s hard landing (as well as yuan depreciation), while combating inflation which stood at 7.18 percent (y/y) in August. The overnight deposit facility rate and lending facility rate were left unchanged at 5.5 percent and 8 percent, respectively.

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