The week of 20\u201326 March 2026 proved to be one of the most\nconsequential in recent Indonesian economic memory, as the country\nnavigated the twin pressures of a deepening Middle East crisis and a\npost-Lebaran market reawakening. With the Indonesia Stock Exchange\nreopening after the extended Nyepi and Eid al-Fitr holiday, investors,\npolicymakers, and business leaders were forced to reconcile festive\noptimism with a volatile global backdrop shaped by the ongoing\nUS-Israel-Iran conflict and its cascading effects on energy markets,\nsupply chains, and currency stability.<\/p>\n
The Middle East Shadow<\/strong><\/p>\n The dominant story of the week was, without question, the Strait of\nHormuz crisis. Since the US and Israeli strikes on Iran on 28 February\n2026, approximately 1,900 commercial vessels remained stranded in the\nstrait and the Persian Gulf, including two Pertamina tankers detained in\nthe Arabian Gulf. Iran\u2019s parliament moved to legislate permanent transit\nfees of US$2 million per tanker, while selectively allowing passage to\nships from friendly nations such as Russia, China, India, Pakistan, and\nIraq. Malaysian Prime Minister Anwar Ibrahim secured safe passage for\nMalaysian vessels through direct diplomacy with Iranian President Masoud\nPezeshkian \u2013 a notable diplomatic achievement that underscored Jakarta\u2019s\ncomparative disadvantage: Indonesia\u2019s own vessels remained detained,\nwith the Foreign Ministry still working to secure their release.<\/p>\n The geopolitical fallout reverberated through Indonesia\u2019s financial\nmarkets with immediate force. The Jakarta Composite Index (JCI) closed\nThursday, 26 March, down 1.89 per cent to 7,164.09, dragged lower by\nenergy sector losses of 2.91 per cent and heightened risk-off sentiment\nas foreign investors net-sold more than Rp 20 trillion during the\nsession. Bank Central Asia (BBCA) bore the brunt of the foreign sell-off\nin the regular market. The rupiah, however, showed surprising\nresilience, closing slightly stronger at around Rp 16,904 per US dollar,\nbuoyed by cautious optimism over Iran\u2019s reported review of a US-backed\n15-point peace proposal. Earlier in the week, on 25 March, the JCI had\nsurged 2.75 per cent to 7,302 upon reopening, driven by falling oil\nprices, positive Asian market sentiment, and domestic fiscal discipline\nsignals \u2013 only to give back a significant portion of those gains the\nfollowing day as Iran rejected a ceasefire offer and tensions\nreignited.<\/p>\n The broader economic consequences for Indonesia were substantial. The\nFinancial Services Authority (OJK) acknowledged that credit demand \u2013\nparticularly in export and import-linked sectors \u2013 faced disruption,\nwhile analysts warned that sustained high oil prices could push the\nstate budget deficit beyond the 3 per cent GDP threshold, potentially\nrequiring an additional Rp 126 trillion in energy subsidies. Finance\nMinister Purbaya Yudhi Sadewa responded proactively, injecting an\nadditional Rp 100 trillion from the Excess Budget Balance (SAL) into\nstate-owned banks, bringing the total government placement to\napproximately Rp 300 trillion. OJK confirmed this would ease liquidity\npressures, reduce special deposit rates, and allow banks to better align\nlending rates with Bank Indonesia\u2019s 4.75 per cent benchmark. Economists\nfrom CORE and Indef cautioned, however, that the injection would only\nstimulate the real economy if accompanied by direct fiscal measures such\nas targeted social assistance.<\/p>\n Banking Sector: Stability and Aspiration<\/strong><\/p>\n Despite the turbulence, Indonesia\u2019s banking sector offered several\nreassuring signals this week. OJK indicated that two to three banks\ncurrently classified under KBMI III were poised to upgrade to KBMI IV\nstatus \u2013 requiring core capital above Rp 70 trillion \u2013 joining the\nexisting four: BRI, Bank Mandiri, BNI, and BCA. While Bank Syariah\nIndonesia (BSI) aims for KBMI IV status in the medium term, the\ninstitution reported a strong 17 per cent year-on-year rise in unaudited\nnet profit to Rp 1.36 trillion for February 2026, with its gold banking\nservices surging 136.55 per cent to Rp 463 billion in fee-based income.\nBSI also disbursed Rp 1.65 trillion in KUR financing and contributed to\nthe government\u2019s MBG nutritious meals programme. Separately, PT Bank\nSyariah Nasional (BSN), the spin-off from Bank Tabungan Negara\u2019s sharia\nunit, received a strong idAA+ credit rating with a stable outlook from\nPefindo, reinforcing confidence in the sharia banking consolidation\nagenda OJK has been advancing.<\/p>\n The leadership landscape of Indonesia\u2019s capital markets also\nattracted attention. KPEI chief executive Iding Pardi confirmed his\ncandidacy for the BEI chief executive role for the 2026-2030 term, with\nan Extraordinary General Meeting of Shareholders scheduled for June\n2026. The Indonesian Issuers\u2019 Association took a neutral stance, noting\nthe merits of both internal and external candidates, while OJK\u2019s capital\nmarket supervision head Hasan Fawzi confirmed that no formal submissions\nhad yet been received ahead of the 4 May deadline.<\/p>\n Corporate Highlights: Petrochemicals, Infrastructure, and\nDownstreaming<\/strong><\/p>\n Among the week\u2019s standout corporate stories, PT Chandra Asri Pacific\nTbk (TPIA) reported a dramatic financial turnaround, posting a net\nprofit attributable to parent company shareholders of US$1.09 billion\nfor the full year 2025 \u2013 a sharp reversal from a loss of US$68.6 million\nthe previous year. Total revenue surged to US$7.02 billion, and total\nassets expanded to US$12.3 billion, with the group eyeing record\noperational profits in the first quarter of 2026. Its subsidiary PT\nChandra Daya Investasi Tbk (CDIA) also posted impressive results, with\nnet profit rising 285 per cent to US$121 million in its first full year\nas a public company, driven by electricity sales, ship leasing, and\nlogistics.<\/p>\n On the infrastructure and downstreaming front, PT Perkebunan\nNusantara IV PalmCo announced plans to break ground shortly after Eid on\nan integrated palm oil processing facility in the Sei Mangkei Special\nEconomic Zone in North Sumatra. Aligned with national hilirisation\ndirectives from the Danantara investment agency, the project would shift\nthe company from crude palm oil exports towards high-value derivatives\nincluding Bio Propylene Glycol, margarine, and biodiesel. Expected to\ncreate around 2,900 jobs and commence operations by late 2028, it\nrepresents a concrete step towards the downstream industrial ambitions\nPresident Prabowo Subianto has repeatedly articulated. Meanwhile, PT\nWaskita Beton Precast Tbk (WSBP) completed its seventh CFADS debt\nrepayment instalment of Rp 109.22 billion, bringing cumulative creditor\npayments under its peace agreement to Rp 650.87 billion, while\ncontinuing work on strategic infrastructure projects including toll\nroads and the DPR building at the new capital IKN.<\/p>\n Policy, Trade, and Investment<\/strong><\/p>\n The week saw Finance Minister Purbaya announce the extension of the\nindividual tax return filing deadline from 31 March to 30 April 2026,\nciting the overlap with Ramadan and Eid holidays and technical\ndifficulties with the Coretax system \u2013 which Purbaya himself described\nas \u201cspinning\u201d during his own filing. As of 25 March, 9.07 million\ntaxpayers had submitted returns, falling short of the 10 million target.\nOn the trade front, Indonesia\u2019s delegation headed to the 14th WTO\nMinisterial Conference in Yaound\u00e9, Cameroon, to advocate for WTO reform,\nrestoration of the dispute settlement mechanism, and fair treatment for\ndeveloping nations in areas spanning fisheries subsidies, agriculture,\nand e-commerce. President Prabowo, meanwhile, reaffirmed that\nIndonesia\u2019s Agreement on Reciprocal Trade with the United States \u2013\nreducing tariffs from 32 per cent to 19 per cent and providing\nzero-tariff access for 1,819 Indonesian commodities \u2013 would not\ncompromise national interests, particularly the downstreaming mandate\nfor critical minerals.<\/p>\n The broader investment agenda remained active despite global\nheadwinds. North Kalimantan maintained its position as the highest\ninvestment target province in Region 5 with a revised Rp 30.55 trillion\ngoal, North Maluku\u2019s Governor Sherly Tjoanda courted Bugis-Makassar\nentrepreneurs for food and logistics investments, and the PSBM XXVI\ngathering in Makassar brought together national leaders and business\nfigures to strengthen eastern Indonesia\u2019s economic networks. Danantara\nattracted headlines of a different kind as reports circulated of its\npotential interest in US independent film studio A24 \u2013 an investment the\nsovereign wealth fund said would be subject to rigorous due diligence\nand alignment with its mandate for strategic national returns.<\/p>\n Looking Ahead<\/strong><\/p>\n The coming weeks will be defined by several converging developments.\nThe anticipated summit between US President Donald Trump and Chinese\nPresident Xi Jinping in Beijing on 14-15 May \u2013 delayed from its original\nschedule due to the Iran conflict \u2013 carries significant implications for\nglobal trade dynamics and, by extension, for Indonesian exports and\ncommodity prices. The OJK under its newly inaugurated Chair Friderica\nWidyasari Dewi faces an immediate agenda of stabilising capital market\nconfidence, overseeing the KBMI bank upgrades, and accelerating sharia\nunit spin-offs. On the fiscal front, the government\u2019s management of\nenergy subsidy pressures, the SAL injection\u2019s transmission into real\nlending, and the coal export duty set to take effect on 1 April will all\ntest policy coherence in the face of sustained external shocks.\nIndonesia enters the second quarter of 2026 with genuine structural\nstrengths \u2013 resilient banking fundamentals, an active downstreaming\nagenda, and a large domestic consumer base \u2013 but the Hormuz crisis has\nmade clear that the nation\u2019s energy import dependence and exposure to\nglobal volatility remain critical vulnerabilities that no amount of\nfestive optimism can fully obscure.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/this-week-in-indonesian-business-and-investment-20-26-mar-2026-1774609274",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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