Indonesia Vows Market Reform After USD 80 Billion Rout; Bourse Chief Quits

Indonesia's chief economic minister promised increased financial market transparency and improved corporate governance on Friday, after the stock exchange chief resigned to take responsibility for a USD 80 billion share rout. 

Airlangga Hartarto, at a news conference, said authorities were committed to stock market reform and that the country's economic fundamentals remained sound. 

Proposed improvement measures include doubling the free float requirement of shares to 15%, allowing pension and insurance funds to increase capital market investment to 20% of their portfolio from 8%, and checking the affiliation of shareholders with ownership of less than 5%. 

"The government guarantees protection for all investors by maintaining good governance and transparency," Airlangga said. 

Index provider MSCI flagged a possible downgrade of Indonesian stocks to "frontier" status on Wednesday due to concern about share ownership and trading transparency, triggering the steepest two-day share price fall since April. 

Indonesia Stock Exchange CEO Iman Rachman resigned on Friday. 

"I hope this is the best decision for the capital market. May my resignation lead to improvement in our capital market," Iman told a press conference. "Hopefully, the index, which opened positively this morning, will continue to improve in the coming days." 

The Financial Services Authority (OJK) will ensure Iman's resignation does not affect operations, an OJK official told reporters. It will take the lead in implementing reforms and aims to resolve the MSCI's concerns by May, the official said. 

"We remind all investors to remain calm and rational when making investment decisions," said Inarno Djajadi, who overseas capital markets at the regulator. 

The benchmark Jakarta Composite Index opens new tab dropped more than 8% on Wednesday and Thursday but was last up 1.18%, a day after authorities announced the proposed measures to address MSCI's concern and ease investor worry. 

The rupiah was last at 16,790 to the U.S. dollar, hovering near its weakest-ever rate of 16,985 set last week. 

Someone had to take responsibility for the loss of confidence, said Mohit Mirpuri, portfolio manager at SGMC Capital in Singapore, referring to Iman. 

"The bigger picture is a reset and an opportunity for the exchange to emerge stronger with clearer standards and governance," Mirpuri said. 

Foreign capital outflows have increased due to concern about how President Prabowo Subianto is widening the fiscal deficit and expanding state involvement in financial markets. 

This month's appointment of his nephew Thomas Djiwandono to the central bank and last year's firing of respected finance minister Sri Mulyani Indrawati have shaken confidence in Prabowo's stewardship. 

Regulators said communication with MSCI has been positive and that they were awaiting a response to their proposed measures which they hoped to implement soon. 

Their swift action appears to have allayed investor concern but sentiment remains fragile. 

"Policymakers want to fix this," said Paul Dmitriev, senior analyst and co-portfolio manager at Global X ETFs. "The government has every incentive to fix these issues as systemic outflows would be substantial and could materially impact the market." 

Foreign investors sold around a net USD 645 million worth of shares in the two-day selloff, exchange data showed. They sold USD1 billion worth of shares in 2025. 

Source: Reuters 
 

Thomas Djiwandono Secures BI Deputy Governor Post

The House of Representatives has officially picked Thomas “Tommy” Djiwandono to become a senior official at Bank Indonesia (BI) following his confirmation hearing on Monday in which he addressed market sentiment and guaranteed the central bank’s independence during his tenure. 
 
Tommy, who currently serves as a deputy finance minister, went through the screening interview conducted by members of House Commission XI, which oversees financial affairs. The House came to the decision swiftly after wrapping up the interview.  

Mukhamad Misbakhun, the commission’s chairman, announced Tommy’s selection to the media mere minutes after the candidate left the building, saying that he was “a figure that can be accepted by all political parties” and that the decision would be brought to the plenary session the very next day.  

The future deputy governor addressed market sentiment during his presentation in the hearing, acknowledging that the “assumptions made about him were not good” given his familial ties with President Prabowo Subianto.  

He said there was “no other way” to ward off the naysayers “but to work as hard as I can”.  

President Prabowo nominated Tommy, his nephew, on January 19 to replace former deputy BI governor Juda Agung, who resigned with immediate effect on January 13, according to BI. On the same day, Finance Minister Purbaya Yudhi Sadewa stated that Juda was slated to take Tommy’s position as deputy finance minister.  

Both the rupiah and the yields on Indonesia’s 10-year bond were hit by Tommy’s nomination, given concerns about BI’s independence.  

The rupiah, which has already been battered by global uncertainties, experienced a sharp weakening shortly after the news of Tommy’s nomination broke. The currency flirted with its historic low against the US dollar last week but has since regained its footing by a respectable margin.  

The bond yield, however, continued its rise from the ballpark of 6.1% in December to 6.3% following the nomination. The figure rose again to 6.41% on Friday but receded to 6.33% on Monday, reflecting a worsening investor perception of the risks of Indonesian bonds 
 
BI Governor Perry Warjiyo revealed on Wednesday that all nominations originated from his recommendations to the President and vowed that BI would maintain professionalism and data-based decision-making irrespective of what played out in the deputy governor race. 

Tommy was nominated alongside two other candidates: Solikin M. Juhro, an assistant governor at the central bank, and Dicky Kartikoyono, likewise an official at BI. Solikin went through the screening interview on Friday while Dicky took his on Monday, shortly before Tommy.  

The nominees have built their careers within the monetary policy authority, save for Tommy, who has served as deputy finance minister since July 2024, an appointment some experts had described as problematic.  

Tommy emphasized “synergy” between the fiscal and monetary authorities during the hearing, which has to be reinforced without hurting BI’s independence and while staying on track with “the mandate”.  

He said the monetarist approach adopted by Finance Minister Purbaya, which puts heavy stress on liquidity availability, was “worth considering” given his view that it would boost growth. 

Tommy wrote in the presentation deck that the burden-sharing scheme “will not be continued” but did not state this during the hearing. When reporters asked for confirmation on the matter, he answered: “Burden sharing is a concept of the past”.  

The scheme, which enlists the central bank in shouldering the cost of financing the state budget, was introduced during the coronavirus pandemic in 2020. It allows BI to buy government bonds in the primary or secondary market but returns all or part of the interest it earns on the coupon.  

Introduced as a crisis response in 2020 as a lifeline thrown to the state to allow for a selling spree as the government strove to keep economic activity going, the scheme remains in place today, long after the pandemic ended.  

Tommy is the son of Soedradjad Djiwandono, BI governor in the 1990s who was married to Prabowo’s sister Biantiningsih Miderawati Djiwandono, and also served as deputy CEO of Arsari Group, which belongs to Prabowo’s brother Hashim Djojohadikusumo.  

The future deputy governor attended Haverford College in Pennsylvania, in the United States, for his undergraduate degree and earned a master’s degree in international relations and international economics from Johns Hopkins University.  

Questions arose regarding Tommy’s political affiliation when his nomination emerged but he revealed in the interview that he had not been a member of Prabowo’s Gerindra Party since the end of last year, which he said was “part of the commitment to BI independence”. 

Source: The Jakarta Post 

Indonesia to Launch Transportation Decarbonization Roadmap in May

The Indonesian government is set to launch a roadmap for decarbonization in the transportation sector in May 2026, according to Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono. 
 
“By this coming May, we expect to have a final product for the transportation decarbonization roadmap,” Yudhoyono said while opening the Town Hall Meeting on Transportation Decarbonization Acceleration in Jakarta on Monday. 
 
The roadmap will outline the government’s medium- and long-term strategic measures to reduce carbon emissions across the transportation sector. 
 
Yudhoyono highlighted several priority efforts, including accelerating the drafting and enactment of regulations for the development of the Trans-Sumatra, Trans-Kalimantan, and Trans-Sulawesi railway networks. 
 
The Coordinating Ministry for Infrastructure and Regional Development is also preparing a presidential regulation on the implementation of sustainable aviation fuel. 
 
In addition, the minister emphasized the use of carbon offset mechanisms within transportation subsectors to support the achievement of national decarbonization targets. 
 
“Hopefully, what we finalize by May can become valuable material to present at COP31 in Turkey in November 2026,” he said. 
 
He expressed optimism that the roadmap would encourage stronger collaboration among ministries, government agencies, and state-owned enterprises (SOEs) in advancing transportation decarbonization. 
 
As part of the initiative, the ministry has committed to four pilot projects. One focuses on land transportation decarbonization, including Bus Rapid Transit (BRT) systems, electric vehicles (EVs), and the use of biofuels. 
 
Another pilot project involves the development of the Trans-Sumatra, Trans-Kalimantan, and Trans-Sulawesi railway networks. 
 
In the aviation subsector, the roadmap covers the adoption of sustainable aviation fuel (SAF), while in maritime transportation it includes the implementation of green port initiatives. 
 
“The Coordinating Ministry for Infrastructure and Regional Development is working to manage and oversee the establishment of this roadmap for the medium and long term,” Yudhoyono said. 

Source: Antara News