Indonesia c.bank hikes rates for first time since 2018
 to temper inflation 

  Indonesia’s central bank raised its benchmark interest rate for the first time since 2018 on
  Tuesday, stepping up monetary tightening to fight rising inflation and stabilize the rupiah. 

  Southeast Asia’s largest economy has made a steady recovery from pandemic disruptions
  and benefitted from strong global demand for commodities. The central bank now expects
  economic growth to come in near the top end rather than lower end of its 4.5%-5.3% forecast in
  2022. 

  Bank Indonesia (BI) hiked the seven-day reverse repurchase rate by 25 basis points (bps) to
  3.75%. 

  Most analysts surveyed by Reuters had expected BI to stand pat, with a significant minority -
  11 of 27 economists - predicting a rate hike. The last time BI raised its key rate was in
  November, 2018. 

  “The decision to increase interest rates is a pre-emptive and forward-looking step to mitigate
  the risk of rising core inflation and inflation expectations,” Governor Perry Warjiyo told a
  news conference, noting “very high” food inflation and rising prices of non-subsidized fuels. 

  The move took into account a strengthening domestic economy and was also targeted at
  stabilizing the rupiah, Warjiyo said, though he did not indicate if more rate rises were likely in
  the coming months. 

  The rupiah erased earlier losses and posted a 0.34% gain by the close on Tuesday. The stock
  market extended gains. 

  PRICE PRESSURES 

  Indonesia’s government is considering raising subsidized fuel prices, which would
  intensify pressure on inflation that is already at a seven-year high of 4.94% in July. 

  Warjiyo said headline inflation was forecast at 5.24% this year, compared with below 5%
  previously - well above BI’s 2% to 4% target. He said core inflation could reach 4.15% at the
  end of 2022. 

  Asked about the potential fuel price hike, Warjiyo said BI would update its inflation outlook in
  line with the government’s subsidy policy. 

  Radhika Rao, senior economist at DBS Bank, said the rate rise was to front-run a potential
  increase in subsidized fuel prices as well as to anchor inflationary expectations. 

  “As the central bank sets the ball rolling, we retain our expectations of at least 50 bp more hikes
  by end-2022.” 

  The absence of forward guidance on rates meant “BI is unlikely to follow-up with aggressive
  interest-rate hikes,” said Bahana Securities economist Satria Sambijantoro, predicting another
  25 bps increase this year at most. 

  Complementing the rate decision, Warjiyo said BI will conduct what it calls “operation twist” in
  which it will sell short tenured bonds and buy bonds with medium to long maturities. 

  The objective of the operation was to attract portfolio investment and strengthen the rupiah,
  while lowering borrowing costs for the government, he said. 

  BI cut rates by 150 basis points and injected billions of dollars into the financial system during
  the COVID-19 pandemic. It has begun to tighten liquidity this year. 

  Source: Reuters 

  Govt preparing alternative scheme for fuel oil price: minister 

  The Indonesian Government is currently preparing an alternative scheme for adjusting the price
  of fuel oil, Coordinating Minister for Economic Affairs Airlangga Hartarto has informed. 

  "(About) the scheme, the government has prepared several alternatives, and of course, we will
  report it to the President soon," he said at the Presidential Palace, here on Tuesday. 

  Earlier, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan had
  hinted at the possibility of President Joko Widodo (Jokowi) announcing an increase in fuel
  prices, saying the government cannot continue to maintain the current price of diesel fuel
  and Pertalite (subsidized fuel). 

  "Because, we cannot maintain them (the prices) that way after all. To reduce the pressure on us
  (our state budget) due to the rising price of crude oil, we must be prepared," Pandjaitan
  emphasized during a public lecture on August 19, 2022. 

  Hartarto said the announcement regarding the fuel price adjustment is awaiting a decision on
  strategies. 

  "The announcement is waiting for the scenario taken later," he added. 

  For 2022, the government has set subsidies of Rp502.4 trillion for fuel, comprising energy
  subsidies of Rp208.9 trillion and energy compensation of Rp293.5 trillion. Currently, only 6
  million kiloliters of subsidized Pertalite is left out of the 23 million kiloliter quota allocated until
  the end of 2022. 

  Furthermore, the government has estimated that Pertalite will run out in October 2022, so there
  is a need for additional volumes, including subsidized diesel fuel. 

  The National Energy Council (DEN) has suggested two ways the government can meet the fuel
  subsidy target: implementing a closed distribution scheme through the use of an application and
  providing direct cash assistance to needy people to maintain their purchasing power. 

  DEN has a long-term strategy to reduce fuel imports, which includes accelerating the conversion
  of cars from fuel-to electricity-based. 

  Source: Antara 

  Cars get hungry too: KFC dips feet in EV charging business 

  Venturing far from its core business, KFC Indonesia is offering customers the use of electric
  vehicle charging stations (SPKLUs) at two of its outlets to boost sales for its license holder PT
  Fast Food Indonesia (FAST).  

  Fast Food Indonesia director Dalimin Juwono said the SPKLU plan was aimed at meeting the
  needs of KFC customers with electric vehicles (EVs) in Jakarta.  

  "The company provides a facility in the parking area of its outlets for the installation and
  operation of public electric vehicle charging stations," he said in a statement released through
  the Indonesia Stock Exchange (IDX) on Monday.  

  The fast-food giant has SPKLUs at two outlets, namely KFC Jalan Panjang in West Jakarta and
  KFC Artha Gading in North Jakarta. It has not stated a target for the number of SPKLUs to be
  installed by the end of this year.  

  Dalimin explained that investment for the construction and installation of the SPKLUs was fully
  borne by business partner PT Agra Surya Energy, with KFC Indonesia providing the land.  

  “We do not have any direct cooperation with PLN […], as the installation of these SPKLUs is a
  part of our promotion and marketing effort for [KFC] restaurant customers who have electric
  vehicles, as well as to increase the company's turnover.”  

  He added that KFC Indonesia's expansion into the SPKLU business was intended to support
  Presidential Regulation No. 55/2019 on speeding up the use of EVs for road transportation.  

  Based on FAST's financial statements, the company recorded a profit of Rp 32.66 billion
  (US$2.19 million) in the first half of 2022, after losing Rp 76.91 billion in the same period
  last year.  

  During the first semester of this year, the company recorded revenue of Rp 2.86 trillion, up
  18.01 percent year-on-year (yoy).  

  Most of FAST’s first-half revenue came from food and beverage sales amounting to Rp 2.84
  trillion, up from Rp 2.40 trillion in the same period last year.  

  Jakarta was the largest contributor to KFC Indonesia's revenue, accounting for Rp 1.03 trillion
  in the first half of 2022, while other areas contributed Rp 846.99 billion.  

  As of June, FAST operated 729 KFC outlets in Indonesia, up from 727 operated in December
  2021. 

  For the third and fourth quarters of this year, the company has targeted to add 21 new KFC
  outlets without closing any existing outlets. 

  Source: The Jakarta Post