JAKARTA (TheInsiderStories) — Good morning! Disagree with European Union restriction on palm oil, Indonesia threatened to ban imports of some goods from the EU as a retaliation. Coordinating Minister for Maritime Affairs Luhut Pandjaitan hinted that jets manufactured by European companies could be among the targets.
He added, Indonesia may need about 2,500 aircraft in the next two decades. The EU’ palm oil restriction is feared to harm Indonesian economy. Especially, almost 20 million people in Indonesia are dependent on the commodity. This situation also created a tension in Malaysia, as both countries hold 85 percent of palm oil global supply.
Indonesia is also planning to submit a formal protest with World Trade Organization, if the EU ratifies proposal to ban vegetable oil fuels to achieve renewable-energy goals. Meanwhile, the EU argues that it compatible with WTO rules.
The new measure is now in a two-month scrutiny period when the bloc’s member states and the European Parliament can express objections. If none is received, the measure will be published in the EU official journal and become a law.
Furthermore, United States President Donald Trump affirmed that he will keep the import tariffs on Chinese goods, as long as there is no trade agreement reached with China. Previously, the trade deal seemed shaking as China has pushed the Trump administration to remove tariffs, but US didn’t give any certainty.
US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are scheduled to visit China on March 28 and 29. Then, Vice Premier Liu He will visit the US in early April.
Following the Ethiopian Airlines crash, a state-owned enterprise PT Garuda Indonesia Tbk (IDX: GIAA) cancels its order on 49 units of Boeing 737 MAX 8 aircrafts. Garuda Indonesia official said that Boeing has lost consumers’ trust, even though it has tried fixing the aircraft system.
The flight carrier had ordered 50 units of Boeing 737 MAX 8 aircrafts, with one has been arriving in 2017. But the Transportation Ministry ban forbids the aircraft to fly. Garuda Indonesia is now negotiating the cancellation plan. If there is no agreement reached with Boeing, Garuda Indonesia is potentially losing US$26 million from its down payment.
Lion Air, Indonesian airlines which suffered by Boeing 737 MAX 8 crash several months ago, started to prepare for an Initial Public Offering. Lion Air eyes for US$1 billion funding from the corporate action targeted to settle this year, and company is now working with advisers. The value target would be Indonesia’ third-largest IPO on the record.
Then, Bank of Indonesia’ act on keeping 7-Day Reverse Repo rate at 6 percent has given a good sentiment to the market. Rupiah gained power by 0.9 percent and reached its best point this month. Jakarta Composite Index also increased by 0.29 percent to 6,501.77.
The ￼Bank also strengthened accommodative macro-prudential policies by increasing the range of the Macro-prudential Intermediation Ratio (RIM) from 80-92 percent to 84-94 percent. With the relaxation of the RIM, it is expected that bank lending can reach the upper limit of the target of 10-12 percent this year.
May you have a profitable day!
Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia