Indonesia\u2019s financial markets are expected to close in positive\nterritory today. The Jakarta Composite Index (JCI) managed to reverse\ncourse and close Monday\u2019s trading (31\/8\/2026) in the green, with modest\ngains amid still-high market volatility and investor portfolio\nadjustments ahead of the effective MSCI rebalancing.<\/p>\n
Based on trading data, the JCI closed up 7.36 points, or 0.11%, at\n6,525.48. During the session, the index had fallen to 6,476.18 before\nrebounding to touch a high of 6,528.10.<\/p>\n
The JCI\u2019s gains were mainly supported by large-capitalisation stocks,\nparticularly in the financial sector. PT Bank Rakyat Indonesia (BBRI)\nwas the largest contributor, adding 9.32 points to the index.<\/p>\n
Other stocks supporting the JCI included PT Alamtri Resources\nIndonesia Tbk (ADRO) with 3.24 points, PT Merdeka Gold Resources Tbk\n(BRMS) with 2.97 points, PT Bank Negara Indonesia (Persero) Tbk (BBNI)\nwith 2.81 points, and PT Adaro Andalan Indonesia Tbk (AADI) with 2.20\npoints.<\/p>\n
By sector, gains were led by the industrial sector, which rose 0.50%,\nfollowed by non-primary consumer goods at 0.42% and primary consumer\ngoods at 0.22%.<\/p>\n
However, several sectors remained under pressure. The healthcare\nsector suffered the deepest correction at 2.35%, followed by utilities\nat 0.88%, technology at 0.67%, energy at 0.27%, and property at\n0.20%.<\/p>\n
Among the stocks weighing on the index, PT Bayan Resources Tbk (BYAN)\nwas the largest drag with a negative contribution of 8.67 points. It was\nfollowed by PT Amman Mineral Internasional Tbk (AMMN) at 3.59 points, PT\nSejahteraraya Anugrahjaya Tbk (SRAJ) at 3.52 points, and PT DCI\nIndonesia Tbk (DCII) at 3.41 points.<\/p>\n
Trading activity was also busy. Total transaction volume reached 51.3\nbillion shares, with a transaction value of Rp25 trillion and a trading\nfrequency of 2.39 million times.<\/p>\n
A total of 392 stocks advanced, while 233 declined and 166 were\nunchanged.<\/p>\n
The rupiah began the week under pressure against the US dollar, but\nthe weakening of the Garuda currency began to ease towards the close.\nDuring trading, the rupiah had been pressured to Rp17,755\/US$, but by\nthe close it managed to trim the decline by 45 points.<\/p>\n
Nevertheless, the closing position was still 25 points weaker than\nFriday\u2019s trading (28\/8\/2026), when the rupiah stood at Rp17,685\/US$.<\/p>\n
In the bond market, the yield on 10-year government bonds (SBN) rose\nto 6.99% on Monday, from 6.96% the previous Friday. Rising yields\nindicate that SBN prices are falling as investors sell.<\/p>\n
US stock markets closed lower on Monday, or early Tuesday morning\nIndonesian time. The markets fell after the US and Iran engaged in\nmutual attacks for the first time in a month. Despite this, all three\nmajor Wall Street indices still recorded gains for August.<\/p>\n
The S&P 500 fell 0.33% to 7,686.14. The Nasdaq Composite weakened\n0.12% to 26,370.89. The Dow Jones Industrial Average corrected 374.09\npoints, or 0.7%, to 53,185.90.<\/p>\n
The Dow was pressured by declines in Goldman Sachs and Alphabet\nshares.<\/p>\n
Tensions rose again after US Central Command (CENTCOM) confirmed that\nthe US military on Sunday struck two rocket launchers on Larak Island,\nIran.<\/p>\n
The strike was the first publicly confirmed US attack on Iranian\npositions since late July. Iranian state media also reported that Tehran\nattacked a US military base in Jordan in retaliation.<\/p>\n
Oil prices surged more than 2% on Monday as the renewed US-Iran\nmilitary action shook energy markets. West Texas Intermediate (WTI)\ncrude closed up 2.83% at US$85.76 per barrel, while Brent crude rose\n2.71% to US$90.49 per barrel.<\/p>\n
The rise in oil prices also pushed up long-term US Treasury yields,\nadding pressure to equity markets.<\/p>\n
Tom Hainlin, National Investment Strategist at U.S. Bank Asset\nManagement, assessed that oil prices are already relatively high but not\nyet enough to deal a major blow to the US economy.<\/p>\n
\u201cThe world economy still has enough oil for its needs, and prices of\nUS$80-US$90 are not restrictive enough to cause the economy to\ncollapse,\u201d he told CNBC International.<\/p>\n
According to him, oil prices are currently at the upper end of that\nrange and have not yet changed the outlook for consumer spending,\nbusiness, artificial intelligence (AI), manufacturing returning to the\nUS, or the electrification of the economy.<\/p>\n
However, the situation could be different if oil prices breach US$100\nper barrel. According to Hainlin, that level could begin to become a\nsignificant burden on the economy.<\/p>\n
Despite end-of-month trading being marked by turmoil from rising\nMiddle East tensions, Wall Street still managed to post broad gains for\nAugust, with the technology sector as the main driver.<\/p>\n
The Dow Jones rose more than 1% in August, marking its fifth\nconsecutive monthly gain and the 15th positive month in the last 16.<\/p>\n
Meanwhile, the S&P 500 jumped 2.6% and the Nasdaq Composite\nsurged 3.9% in August, both recording their first monthly gains since\nMay.<\/p>\n
The S&P 500 and Dow Jones even hit all-time highs during\nAugust.<\/p>\n
Indonesia\u2019s financial markets today will be overshadowed by a number\nof important data announcements, from inflation and manufacturing to the\ntrade balance.<\/p>\n
From abroad, the re-escalation of the Iran-US conflict and the fall\non Wall Street could be negative sentiment.<\/p>\n
US President Donald Trump threatened to strike Iran again after the\ntwo countries engaged in direct exchanges of fire for the first time in\nabout a month.<\/p>\n
Iran launched missiles at two US bases in Jordan in retaliation for\nthe US attack on Larak Island. Washington said the strike targeted\nIranian launchers suspected of preparing to lay mines in the Strait of\nHormuz.<\/p>\n
\u201cWe will hit them hard. There will be a response,\u201d Trump said, as\nquoted by Reuters.<\/p>\n
However, Trump said the latest attack did not yet mean a return to\nfull-scale war. He even said Iran had been \u201ccompletely defeated\nmilitarily\u201d.<\/p>\n
In addition to military strikes, Washington continues to pressure\nTehran through secondary sanctions against countries and companies that\nbuy Iranian oil.<\/p>\n
US Treasury Secretary Scott Bessent said Iran began launching attacks\nbecause economic pressure from sanctions is growing heavier. The US even\nplans to announce new sanctions every week, with the banking sector as\nthe initial target.<\/p>\n
Meanwhile, Iranian President Masoud Pezeshkian stressed that Tehran\nstill wants a negotiated settlement.<\/p>\n
The latest escalation poses a threat to the Strait of Hormuz, a route\nthrough which about one-fifth of the world\u2019s crude oil and gas trade\nnormally passes. Disruption in the region could again push up global\nenergy prices.<\/p>\n
Following the escalation, oil prices again touched the US$90 per\nbarrel level.<\/p>\n
The yield on 10-year US Treasury notes rose again on Monday\n(31\/8\/2026), marking a fourth consecutive session of increases. This\nrise in yields is bad news for Indonesia because it could trigger an\nincrease in SBN yields, adding to the government\u2019s debt burden.<\/p>\n
The 10-year Treasury yield rose to 4.76%, its highest level since\nJanuary 2025. The increase came after oil prices surged following the\nrenewed outbreak of clashes between the US and Iran for the first time\nin about a month.<\/p>\n
The surge in oil prices triggered fresh concerns about US inflation,\nwhile also prompting market participants to increase bets on the\npossibility of the Federal Reserve raising interest rates in\nSeptember.<\/p>\n
These expectations strengthened further after Fed Chair Kevin Warsh\nmade remarks at the Jackson Hole symposium last Friday.<\/p>\n
Warsh said the Fed still \u201chas work to do\u201d if policymakers have not\nyet gained confidence that inflation is moving towards the 2%\ntarget.<\/p>\n
Warsh has consistently emphasised the importance of bringing down\ninflation. However, the Fed held rates steady at its June and July\nmeetings, leaving the timing of the next policy change uncertain.<\/p>\n
Markets currently price in a roughly 64% probability that the Fed\nwill raise rates by 25 basis points in September.<\/p>\n
If realised, a rate hike would tighten financial conditions and\npotentially add pressure to risk assets, including equities.<\/p>\n
On the other hand, the combination of rising Treasury yields and oil\nprices is something markets need to watch, as it could reinforce\ninflationary pressures while limiting the Fed\u2019s room to ease monetary\npolicy.<\/p>\n
Indonesia\u2019s August manufacturing PMI data will be released today,\nTuesday (1\/9\/2026). The Purchasing Managers\u2019 Index (PMI) showed\nIndonesia\u2019s PMI stood at 50.2 in July 2026, an improvement after the PMI\nrecorded a contraction in June 2026 (46.9).<\/p>\n
Investors and businesses are awaiting this data to gauge the ability\nof Indonesia\u2019s manufacturing industry heading into the fourth quarter of\n2026.<\/p>\n
Consensus expects the index to edge up to 50.5, from 50.2 in July. If\nit remains above the 50 level, Indonesia\u2019s manufacturing sector is still\nin expansion territory.<\/p>\n
In July 2026, production activity increased for the first time since\nFebruary, amid stabilising new orders and improving customer\nconfidence.<\/p>\n
The rise in PMI was supported by increased production volumes after\nfour consecutive months of decline.<\/p>\n
Although growth remains limited, businesses reported improving demand\nand rising customer confidence.<\/p>\n
However, the surge in raw material prices remains an obstacle to a\nstronger recovery. In line with this, new orders remained stable after a\nsharp contraction in June 2026.<\/p>\n
Statistics Indonesia (BPS) will announce two important data sets\ntoday, Tuesday (1\/9\/2026): August 2026 inflation and the July 2026 trade\nbalance. These data are important for measuring which food and non-food\ncommodities have experienced price spikes and their impact on\nIndonesia.<\/p>\n
Indonesia\u2019s Consumer Price Index (CPI) is expected to rise, or\nexperience inflation, in August 2026. The increase in CPI is mainly\ndriven by rising prices of several food items, gold, and education\ncosts.<\/p>\n
However, lower airfares and non-subsidised fuel prices are expected\nto contain inflationary pressure.<\/p>\n
Market consensus compiled by CNBC Indonesia from 13 institutions\nestimates that CPI on a month-to-month basis will rise, or experience\ninflation of 0.17%.<\/p>\n
Meanwhile, CPI on a year-on-year basis is expected to rise, or\nexperience inflation of 3.11%.<\/p>\n
For reference, in the previous inflation release for July 2026,\ndeflation of 0.14% (mtm) was recorded, while annual inflation stood at\n2.88% (yoy).<\/p>\n
Thus, CPI is expected to turn positive on a monthly basis after\ndeclining in July. Annual inflation is also projected to increase by\n0.25 percentage points compared to the previous month.<\/p>\n
The Office of Chief Economist team at Bank Mandiri expects the rise\nin inflation to be mainly driven by a reversal in volatile food prices.\nThat group is expected to rise again after falling quite sharply in\nJuly.<\/p>\n
The increase is mainly in chicken meat and bird\u2019s eye chilli prices.\nFood price pressures also risk persisting due to production disruptions\ntriggered by El Nino and the dry season.<\/p>\n
\u201cFood price pressures may continue amid production disruptions due to\nEl Nino and the dry season, although lower garlic and shallot prices\nprovide some offset,\u201d wrote the Bank Mandiri Office of Chief Economist\nteam.<\/p>\n
BPS will also release July 2026 trade balance data. For reference,\nIndonesia\u2019s trade balance recorded a deficit of US$450 million in June\n2026.<\/p>\n
This was due to exports worth US$25.46 billion, while imports were\nrecorded at US$25.91 billion.<\/p>\n
The public is now waiting to see whether Indonesia will record a\ndeficit for three consecutive months in July 2026 or manage to turn the\nposition back into a surplus.<\/p>\n
The government began implementing relaxed rules on export proceeds\n(DHE) from natural resources in the mining sector on 1 September 2026.\nThe policy has been socialised to domestic and foreign businesses.<\/p>\n
The relaxation also agreed on 15 foreign exchange banks as placement\naccounts for DHE from natural resources.<\/p>\n
The 15 banks comprise five state-owned banks (Himbara), namely Bank\nMandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI), Bank\nTabungan Negara (BTN), and Bank Syariah Indonesia (BSI).<\/p>\n
The remaining 10 are non-state-owned banks such as Standard Chartered\nBank, Deutsche Bank AG, MUFG Bank Ltd., JP Morgan Chase Bank N.A.,\nCitibank N.A., Bank of China, PT Bank ICBC Indonesia, PT Bank China\nConstruction Bank Indonesia Tbk, PT Bank SMBC Indonesia Tbk, and PT Bank\nHSBC Indonesia.<\/p>\n
The crucial Article 18A is one of the highlighted provisions.<\/p>\n
Article 18A of Government Regulation 21\/2026 sets out special\nprovisions for the implementation of bilateral agreements on trade or\nother trade-related understandings\/agreements.<\/p>\n
For DHE from natural resources originating from the mining sector,\nthe provisions include: the obligation to place at least 30% for a\nminimum period of 3 months from placement in a Special DHE Account;\nplacement may be made at banks conducting business in foreign currency;\nand conversion to rupiah may be made at banks conducting business in\nforeign currency.<\/p>\n
The decision to implement Article 18A was made through a\nMinisterial-Level Coordination Meeting on 23 July 2026.<\/p>\n
The government designated five countries that meet the criteria of\nArticle 18A: the United States, China, Hong Kong, Australia, and\nCanada.<\/p>\n
These five countries are the largest investors in Indonesia\u2019s mining\nsector and also have bilateral agreements on trade or other\ntrade-related understandings\/agreements with Indonesia as required by\nArticle 18A.<\/p>\n
The use of the five largest source countries of mining investment as\nthe basis for selection is intended to ensure that the Article 18A\nfacility is targeted at the investment sources that contribute most to\nnational mining activities.<\/p>\n
The main points of the new rules are as follows:<\/p>\n
Mandatory placement of 30% for a minimum of 3 months for mining\nexporters utilising the Article 18A facility.<\/p><\/li>\n
Funds may be placed at designated state-owned or non-state-owned\nforeign exchange banks.<\/p><\/li>\n
The facility is optional for qualifying exporters.<\/p><\/li>\n
If the facility is not used, exporters remain subject to the old\nrules, namely 100% placement for a minimum of 12 months for non-oil and\ngas mining.<\/p><\/li>\n
The Article 18A facility applies to mining companies in the form\nof limited liability companies (PT) with shareholders from partner\ncountries holding at least 10% ownership.<\/p><\/li>\n
The government has designated five partner countries: the United\nStates, China, Hong Kong, Australia, and Canada.<\/p><\/li>\n
Of 537 identified companies, 64 exporters, or about 12%, meet the\nfacility criteria.<\/p><\/li>\n
A total of 15 foreign exchange banks have been designated as DHE\nplacement venues, comprising 5 state-owned banks and 10 private\nbanks.<\/p><\/li>\n
The policy takes effect from 1 September 2026.<\/p><\/li>\n<\/ul>", "url": "https:\/\/jawawa.id\/newsitem\/today-revised-dhe-bi-incentive-rules-take-effect-inflation-in-focus-1788223881", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }