Research

Indonesia's Commodity Gamble: New Regulation, Big Uncertainty

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Algo Research Team


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Key Summary:


  • Significant trade policies with global repercussions
  • Effectiveness to strengthen Rupiah is questionable
  • Largest uncertainty is on DSI commercial structure

Indonesia is embarking on a new path, implementing two of the most significant trade policies in the past decades that could have a profound impact on the economy.


The first tightens a rule that has existed since 2011, where natural-resource exporters must bring 100% of their proceeds into Indonesia's financial system and park them exclusively at state-owned enterprises (SOE) banks.


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