Indonesia will import 150 million barrels of crude oil from Russia this year, Deputy Energy Minister Yuliot Tanjung said on Friday.
The Southeast Asian country secured supplies of crude oil and liquefied petroleum gas (LPG) from Russia amid energy shortages following the Middle East war.
The minister's announcement came after President Prabowo Subianto met with Russian President Vladimir Putin in Moscow last week.
"It has been agreed that the total volume of crude oil which we will import from Russia is around 150 million barrels to meet our needs until the end of the year," Yuliot told reporters, adding that the government only needed to work out the import mechanism.
Yuliot said the import volume of LPG from Russia has yet to be decided.
Indonesia is also seeking to secure crude oil and LPG from other countries including the United States, Yuliot said.
"We import about 1 million barrels per day, so we can see with this 150 million (barrels) it is still short. We are looking for additional supply from other countries, including the U.S.," he said.
Indonesia has secured a deal to purchase oil and gas from the U.S. under the Agreement on Reciprocal Trade.
"We hope that we can meet our crude oil and domestic LPG needs from various sources," Yuliot said.
Source: Reuters
BI Holds Rate Steady to Rein in Rupiah's Weakening
Bank Indonesia (BI) has decided to leave its benchmark interest rate unchanged to buffer the rupiah’s ongoing depreciation below its fundamental value, which it has deemed is largely driven by the United States-Israel war on Iran.
Following the central bank’s two-day monthly policy meeting, BI Governor Perry Warjiyo announced at a press conference on Wednesday that the benchmark BI-Rate would remain at 4.75%, where it has been since September 2025.
Keeping the rupiah from spiraling downward has become BI’s primary focus as of last month.
Perry said the decision to maintain the current rate was taken to “reinforce the stabilization of the rupiah exchange rate against the impact of worsening global economic conditions due to the war in the Middle East”.
Readings from Investing.com show the rupiah’s exchange rate to the US dollar has been weakening steadily from 16,765 before the initial US-Israeli missile salvo on Feb. 28 to as low as 17,193 on April 22.
Over the war’s nearly two months, the rupiah has been inching ever closer to the nadir of 17,300 per US dollar recorded during the 1998 Asian financial crisis.
The “rupiah is too weak” and its value did not reflect the country’s economic fundamentals, Perry said, adding that “going forward, the exchange rate will stabilize and incline to strengthen”.
He said Indonesia had “strong” foundations and “resilience” to face the fallout from the Iran war, pointing to the country’s low inflation, high economic growth and stable exchange rate.
Buffering Measures
The central bank also “increased the intensity” of its interventions in onshore and offshore markets, Perry said, by buying rupiah assets with foreign exchange (forex) reserves to prevent uncontrolled depreciation of the rupiah.
BI held USD 148 billion in forex reserves in March, a figure equal to six months of imports, double the international adequacy standard of three months. However, this was USD 4 billion less than in February amid a steady decline in foreign reserves since December.
Another set of measures the monetary authority has taken as a buffer against depreciation is tighter control over currency movement, which has been in place since the start of April.
According to BI Deputy Governor Thomas Djiwandono, who also addressed Wednesday’s press conference, this move is intended to prevent speculative transactions.
Included in the measures are cutting the maximum limit for forex purchases by half from previously USD 100,000 per client per month to USD 50,000 and doubling the transaction limit for rupiah purchases in the non-deliverable forward and swap markets.
BI also strengthened oversight of forex flows by mandating documentation for outward remittances exceeding USD 50,000, also half the previous limit of USD 100,000.
Thomas said this particular measure had decreased average daily transactions to USD 60 million from USD 78 million after it went into force.
Constrained Room
In an analysis on Wednesday, Permata Bank chief economist Josua Pardede wrote that any more rate cuts this year “appears increasingly constrained”, as the central bank was forced to maintain stability amid the Middle East crisis.
“Domestic risks also remain elevated, particularly regarding the impacts of these conflicts on Indonesia’s fiscal sustainability and inflation outlook,” Josua said.
“Meanwhile, fiscal flexibility may be constrained by softer government revenue performance. These dynamics have contributed to higher risk premiums on Indonesian assets, exerting pressure on the rupiah.”
Externally, the war presented significant upside risks to global inflation driven by rising energy prices, which reduced the possibility of the US Federal Reserve shifting to monetary easing.
“In this context, BI’s capacity to ease policy will be further limited as it seeks to maintain a favorable interest rate differential relative to the fed funds rate,” Josua said.
In a separate analysis on April 22, Bank Danamon economist Hosianna Evalita Situmorang said the central bank’s current stance “signaled a readiness to recalibrate monetary policy to safeguard financial stability”.
BI Deputy Governor Ricky Gozali told Wednesday’s press conference the war would impact domestic inflation through increased international trade costs and commodity prices. Nevertheless, the central bank had maintained its 2026 inflation projection at 2.5%, plus or minus 1%.
The government has made clear that it intends to maintain subsidized fuel prices for this year at the current rate so the war does not translate into widespread domestic inflation and therefore weaker purchasing power.
A different policy applies to unsubsidized fuels altogether: On Sunday, state-owned energy giant Pertamina imposed a sharp price hike of between 48% and 66% for three of its fuel products.
BI said the increase would be reflected in April’s inflation figures, but assured that the three products only accounted for a mere 0.04 percent of overall growth in the central bank’s consumer price index.
Source: The Jakarta Post
Indonesia Will Not Impose Tariffs in Malacca Strait: Foreign Minister
The Indonesian Minister of Foreign Affairs, Sugiono, has stated that Indonesia will not impose tariffs in the Malacca Strait, as such a policy would be inconsistent with the United Nations Convention on the Law of the Sea (UNCLOS).
He made the statement during a brief interview here on Thursday in response to journalists’ questions about whether Indonesia would introduce tariffs for vessels passing through the strait.
Sugiono emphasized that Indonesia respects international law, including UNCLOS. According to him, UNCLOS recognizes Indonesia as an archipelagic state on the condition that it does not impose tariffs on straits within its territory.
He also stressed that Indonesia supports freedom of navigation and expects maritime traffic to remain smooth, open, and mutually beneficial.
“We also hope for free passage, and I believe this is a shared commitment among many countries to create a shipping lane that is open, neutral, and mutually supportive,” Sugiono said.
“So, no. Indonesia is not in a position to impose such tariffs in the Malacca Strait,” he affirmed.
Earlier, Finance Minister Purbaya Sadewa had mentioned the possibility of imposing tariffs on ships passing through the strait.
On Wednesday, April 22, Singapore’s Foreign Minister Vivian Balakrishnan in an interview said that countries along the Malacca Strait have a strategic interest in keeping the waterway open.
“The right of transit passage is guaranteed for everyone. We will not participate in any attempts to close or interdict or to impose tolls in our neighborhood,” Balakrishnan said.
The Malacca Strait is one of the world’s recognized international shipping lanes, as stipulated under Articles 37, 38, and 39 of UNCLOS, which has been ratified by Indonesia.
Source: ANTARA
