Jokowi-Xi Jinping Meeting Produces 8 Bilateral Consensus 

  The bilateral meeting between Indonesia's President Joko "Jokowi" Widodo and China's
  President Xi Jinping along with Chengdu City's delegates on Thursday, July 27, 2023, has
  resulted in eight consensus across various agendas.  

  "First, the plan of action following the MoU on health," said Foreign Minister Retno Marsudi in a
  press conference broadcasted to the official YouTube account of the Presidential Secretariat on
  Thursday, July 27, 2023.  

  The minister continued explaining the second agreement, which consisted of the protocol for
  agriculture market access to konjac flour commodity. Both countries also agreed on the protocol
  for gaining agriculture market access to tabasheer powder from Indonesia to China. 

  Indonesia-China agreed on research and development of the plant breeding industry and marine
  management. The fifth agreement consisted of the transfer of knowledge and experience
  concerning the development of the Nusantara New Capital (IKN) project.  

  Next, both countries inked an agreement with an MoU to boost Indonesia-China cooperation on
  "Two Countries, Twin Parks". Indonesia and China also signed MoU on technical and economic
  cooperation; and Mandarin education. 

  Retno Marsudi also reported on deliverables which will be explained directly by President Jokowi.
  "Outside of the eight consensuses, there is a deliverable in the form of investment commitment
  which will be explained in detail tomorrow after the business meeting," she said. 

  President Jokowi is also set to attend several business meetings with Chinese investors and
  attend the opening of the FISU University Games on his second day of visit to Chengdu, China. 

  Source: Tempo

  Indonesia to make it less painful for exporters to keep earnings onshore,
  official says 

  Indonesia is developing a scheme for banks to provide a financing facility for exporters who keep
  their earnings onshore, after business groups complained that new rules made it harder to cover
  operational costs, a government official said. 

  Under a rule introduced earlier this month, natural resource exporters must retain for three months
  in the domestic financial system 30% of their proceeds for every custom document for exports
  worth at least $250,000, starting from Aug. 1. 

  The regulation, which was intended to boost domestic foreign exchange supply, has sparked a
  backlash from exporters who said parking funds for three months took away cash needed for
  operations. 

  Coal miners' profit margins were already squeezed by plunging global prices and rising fuel
  costs, and the new rules would hinder their ability to pay contractors and vendors, Pandu Sjahrir,
  chairman of Indonesia Coal Miners Association, said in a statement. 

  Eddy Martono, chairman of the Indonesian Palm Oil Association, also complained that companies
  must set aside funds for operational costs if they were unable to use some of their revenues for   
  three months. 

  "If we have to get that from a bank, there will be more cost involved," he told Reuters. 

  Ferry Irawan, senior official at Indonesia's coordinating ministry of economic affairs, told Reuters
  the government is finalizing rules to address exporters' concerns. 

  "We will prepare a banking regulation that allows a back-to-back loan where the proceeds that an
  exporter put into a bank can be used as a lending collateral," he said. 

  Authorities are also working on new tax incentives that will ensure an attractive return for
  exporters' funds parked onshore, which will be competitive with returns offered for term deposits
  offshore, he said, without elaborating. 

  The government has already set a lower tax rate on the earnings that exporters receive in interest
  from their rupiah term deposits at local banks. 

  Earlier this year, Bank Indonesia launched a new instrument that allowed banks to pass
  exporters' funds to the central bank, where they would be placed in term deposit carrying high
  returns. 

  Bank Indonesia Governor Perry Warjiyo on Tuesday said it would revise central bank rules on
  export proceeds to align with the government's new export retention regulation, but did not
  provide details. 

  Source: Reuters

  Indonesia Central Bank Keeps Rates Unchanged, As Expected

  Indonesia's central bank held its key policy rates steady for the sixth straight review on Tuesday,
  saying current levels were sufficient to ensure inflation stays within target this year. 

  Bank Indonesia (BI) kept the benchmark seven-day reverse repurchase rate at 5.75%, where it
  has been since January, a decision widely expected in a Reuters poll. Its two other rates were
  also left unchanged. 

  Inflation in Southeast Asia's largest economy, which shot up last year amid rising food and energy
  prices, returned to BI's target range in May and is expected to continue to ease heading towards
  the year's end. 

  That has prompted some analysts to predict BI will start to consider easing monetary policy to
  bolster support for the economy amid an expected slowdown in growth due to falling exports. 

  BI's decision comes as market participants brace for a likely U.S. Federal Reserve rate hike later
  this week. 

  The trajectory of monetary policy in the United States has affected capital flows to Indonesia and
  the rupiah's exchange rate. However, the currency has stabilized in the past week on
  expectations the Fed is nearing the end of its rate hiking cycle. 

  Indonesia's annual inflation in June cooled to 3.52%, the lowest in 14 months, having peaked
  near 6% in September. BI raised Indonesia's rates by a total of 225 basis points between August
  to January. 

  BI kept its 2023 economic growth outlook in a range of 4.5% to 5.3%, compared with last year's
  growth of 5.3%. 

  Source: Kontan