The central bank of Indonesia (Bank Indonesia) cut its key interest rate (BI rate) by 0.25 percentage point to 6.50 percent at Thursday's policy meeting (16/06). Although the central bank had stated at its preceding policy meeting that there remained room for monetary easing, today's move was a surprise that few analysts saw coming. The 7-day reverse repurchase rate, which is set to become the central bank's new benchmark rate on 19 August, was also cut by 25 basis points (to 5.25 percent) at today's policy meeting.

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It was a bad start of the new trading week. Stocks in Asia were deep in the red due to risk aversion, falling the most in four weeks amid concern about the "Brexit" referendum, uncertainty before this week's central bank meetings in the USA and Japan, falling crude oil prices, and the worst mass shooting in modern US history. Indonesia was among the affected markets; the benchmark Jakarta Composite Index fell 0.84 percent to 4,807.23 on Monday (13/06), while the rupiah only depreciated slightly to IDR 13,298 per US dollar (Bloomberg Dollar Index).

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Indonesia is expected to challenge the anti-dumping measures on fatty alcohol - set by the European Union (EU) - at the World Trade Organization (WTO) as bilateral meetings have not led to the desired outcome. Recently, two Indonesian companies (Musim Mas and Ecogreen Oleochemicals) were forced by the EU to pay anti-dumping duties as these companies sold fatty alcohol at prices that were lower than those in the EU. Fatty Alcohol is made from palm kernel oil (a palm oil derivative) and are used in a wide variety of personal care products.

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Colin Crooks, Deputy Head of the European Union delegation to Indonesia, Brunei Darussalam and ASEAN, said that Europe's businesses are eager to invest in Indonesia. However, the European Union (EU) hopes that several issues that are blocking the Indonesian economy (particularly related to trade and investments) from growing further are dealt with. Crooks pointed at EuroCham's position papers, which discuss bottlenecks to Indonesia's investment climate and provides recommendations for its improvement.

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After months of significant Russian military build-up around the borders of Ukraine – and after Russia had officially recognised two self-proclaimed states in the Donbas region of Ukraine (namely Donetsk and Luhansk People's Republics where there had emerged a war between the Ukrainian military and Russian-backed separatists) on 21 February 2022 – Russia launched an invasion of Ukraine on 24 February 2022.

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I have been living in Indonesia for more than eight years (and before permanently moving to this beautiful country I had been visiting Indonesia frequently since late- 1998). But although I’m currently far away from the West, I’ve never been following Western politics and Western media closer than I am doing now - and with Western politics I mainly refer to the political and (interrelated) social developments in the European Union (EU) and the United States (US).

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Contrary to our usual coverage, in this edition of the monthly Indonesia Investments’ report there is some emphasis on political and socioeconomic developments in the West (referring to the United States and the European Union). The main reason for this is that the West – and we have seen this throughout history (for example during colonial days) – has a huge influence on the rest of the world, including Indonesia.

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Several negative sentiments are putting pressure on the crude palm oil (CPO) price in the first week of March 2018. These sentiments are expected to continue pushing downward pressure on the CPO price in the remainder of this week. On Monday (05/03) the CPO price on the Malaysia Derivatives Exchange (May 2018 shipments) fell 0.28 percent to 2,467 ringgit per metric ton. Compared to one week earlier, the price has now declined 2.91 percent.

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In the battle between Indonesia and the European Union (EU) regarding the latter's anti-dumping duties on Indonesian biodiesel exports, Indonesia won six out of seven legal challenges. Indonesia had challenged the EU's duties, set in 2013, on biodiesel imports from Indonesia and Argentina. The World Trade Organization (WTO) ruled, largely, in favor of Indonesia.

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Anyone that has been reading the news headlines in the financial markets over the last few weeks has undoubtedly turned some of their attention to the possibility that Great Britain might elect to leave the European Union. The financial news media has colorfully termed this event as the ‘Brexit’ and markets analysts have been debating the likelihood of its impact ever since. 

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The Indonesian rupiah exchange rate continued its impressive rebound in 2014, supported by Indonesia's improving economic fundamentals as well as increased political certainty due to the nomination of Joko Widodo (Jokowi) as the main opposition party's (PDI-P) presidential candidate. As such, the 'Jokowi effect' managed to offset negative market sentiments brought on by the (disputed) referendum in Crimea that showed that 97 percent of voters support a split from Ukraine. This intensified political tensions between the West and Russia.

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