Shock Interest Rate Hike, Carbon Capture Regulation Soon, G20 Working Group Priorities, New US Envoy to ASEAN
Sep 23, 2022
BI’s Surprise 50 bps Interest Rate Hike
Bank Indonesia (BI) has raised its benchmark interest rate the 7-Day Reverse Repo Rate by 50bps to 4.25 percent, in a move to curb inflation, strengthen exchange rates, and stabilize the economy. During a Board of Governors meeting on Sept 21-22, BI also raised its deposit facility (DF) and lending facility (LF) rates by 50bps to 3.5 percent and 5 percent respectively.
This surprise decision is the result of uncontrollable inflation in Indonesia, and a potential spike due to the fuel price increase. BI also raised the benchmark rate by 25bps last month, the first increase since November 2018, marking the end of the low interest rate trend over the past few years.
Economists say the decision is forward-looking to curb inflation spikes in the future, and normalize the consumer price index (IHK) back to 4 percent in 2023. Despite the rise, interest rates are still seen as low historically, and could potentially strengthen the rupiah. Several economists predict BI will raise interest rates again next month, considering the expected inflation spikes over the next few months.
A draft ministerial regulation (Permen) concerning carbon capture, utilization, and storage (CCUS) technology is expected to be passed this year, Director General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM) Tutuka Ariadji said. CCUS is the process of capturing carbon dioxide emissions to be recycled for other usage. The Director General said the regulation will cover provisions on carbon injection techniques, cost, and monitoring processes.
The regulation aims to encourage oil and gas production, as well as achieve carbon emission reduction targets. The draft is being harmonized by the Ministry of Law and Human Rights. ESDM has also coordinated with the Coordinating Ministry for Maritime Affairs and Investment, the Ministry of Environment and Forestry, and various international institutions.
Grand Hyatt Jakarta held a Women’s Talk session on Aug 31 in the Rinjani meeting room with the theme of Wonder Women Around Us. The event was part of Hyatt’s global campaign of Diversity, Equity and Inclusion. Hosted by kumparanWOMAN Chief Fitria Sofyani, the discussion featured two inspiring ladies: Stefanie Soewono, Marketing Communications Manager of Bulgari and Bang & Olufsen and Martha Marpaung, Hygiene Manager of Grand Hyatt Jakarta. The guest speakers shared their wisdom and experiences as women in leadership roles.
The Women’s Talk sessions are held annually by Grand Hyatt Jakarta in order to empower women and promote gender equality, while highlighting the achievements of every individual. For more information, please visit @grandhyattjakarta on Instagram.
Let Us Know Your Recent Social Responsibility Initiatives!
We have received positive responses for this program and would like to continue featuring your CSR stories and best practices. It is wonderful to learn the great things that our members are doing for the community.
The G20 Trade, Investment, and Industry Working Group (TIIWG) Ministerial Meeting has issued its support for six priority issues to address global trade challenges. They include World Trade Organization (WTO) reform, the role of a multilateral trade system to strengthen the UN's Sustainable Development Goals (SDGs), digital trade and the global value chain.
The collective discussion is expected to provide a strong basis for closer collaboration among G20 ministers, Director General of International Trade Negotiations at the Ministry of Trade Djatmiko Bris Witjaksono said. He also said current geopolitical conditions are a challenge for reaching consensus among G20 member countries, so it is important for the G20 forum to affirm its relevance to solve current global challenges.
Minister of Trade Zulkifli Hasan met with United States Trade Representative (USTR) Ambassador Katherine Tai on the sidelines of the meeting. Zulkifli congratulated Ambassador Tai on the Indo-Pacific Economic Framework (IPEF) meeting this month. He also asked for Ambassador Tai’s support in accelerating the Generalized System of Preferences (GSP) implementation authorization.
Yohannes Abraham has been sworn in as the new US Envoy to ASEAN by Vice President Kamala Harris. Abraham, the former chief of staff and executive secretary of the National Security Council, will fly to Jakarta in October to fill the post which has been vacant since January 2017, when then President Donald Trump took office and did not appoint a replacement for previous envoy Nina Hachigian. The appointment reflects the importance of ASEAN to the US, said a US Mission to ASEAN spokesperson.
Siemens Indonesia Receives Two HR Excellence Awards
Siemens Indonesia received two HR Excellence Awards at the awards gala held by Human Resources Online magazine in Jakarta on Sept 16, which are organized annually to highlight the best corporate human resource management initiatives. This year, Siemens Indonesia won Bronze Awards in two categories, “Excellence in HR Change Management” and “Excellence in Workplace Culture.”
As a technology-focused company, Siemens Indonesia said it believes its employees need to stay resilient and relevant by actively driving continuous personal and professional learning. The company fosters a culture of learning and a workplace that inclusively enables everyone to engage, adopt a growth mindset and the habit of everyday learning to grow into the future.
The AmCham Office is transitioning back to the office. We are still maximizing online meetings, using the Zoom platform, but starting to have in-person meetings. You will be notified of the meetings as they are scheduled.
What is Your Company Doing on COVID-19?
Please let us know what measures your company may be taking in the form of donations and other assistance to help Indonesia during this time of confusion and concern. Contact [email protected] with your news. We would like to publicize the ways that our AmCham companies are pitching in.
Stay safe, call a doctor if you have a high fever, cough, or difficulty breathing. Stay healthy above all else.
AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard is the Managing Editor.