Morning Briefing: Jusuf Kalla, Sri Mulyani Join Widodo’s Re-election Campaign Team

The Jakarta Composite Index fell by 0.36 percent to 6,250.26 and hit its week-lowest, along with Rupiah that weakened by 0.23 percent in the middle of Prabowo Subianto' lawsuit at the Constitutional Court - Photo: Special

JAKARTA (TheInsiderStories) – Good Morning. President Joko Widodo has officially picked Vice President Jusuf Kalla to lead the 11-strong steering committee for his re-election bid in 2019.

Other members are Try Sutrisno, Puan Maharani, Pramono Anung Wibowo, Agung Laksono, Akbar Tanjung, Dimyati Rois, Siswono Yudo Husodo, Suharso Monoarfa, Sidarto Danusubroto, Laksamana TNI (ret.) Prof. Dr. Marsetyo and Sri Mulyani Indrawati.

The inclusion of Indrawati is a surprise. The popular finance minister was previously considered as a favorite to run as Widodo’s running-mate, but her lack of political affiliation is a drawback. Widodo then picked influential cleric Ma’ruf Amin instead.

The inclusion could partly explain Indrawati’s audacity to confront the chairman of People’s Consultative Assembly Zulkifli Hasan directly and publicly. The finance minister’s labeled Hasan’s earlier statement that Indonesia’s debt level is beyond normal level and the state’s ability to repay as both ‘misguided’ and politically motivated.

Meanwhile, the government today kicked off the offering period of two-year savings bond retail. The government aimed to raise Rp1 trillion from the paper which is priced at a floating rate of 8.05 per cent per annum.

Furthermore there is a good news for coal miners as the government has officially raised the production quota for 2018 by 100 million tons as part of a trade-off for a policy that cap the price of the commodity purchased domestically by state-owned power producer PT Perusahaan Listrik Negara.

Higher production of coal is expected to bring more foreign exchange revenue from exports, thus helping to stabilize the already volatile rupiah.

Otherwise, Rupiah stabilization is the primary reason why Bank Indonesia (BI) announced a plan to lower the hedging cost via swap transaction. Through lower minimum transaction, fixing a ceiling on swap rate and also relaxing requirements on underlying assets, BI aims to attract more business entities to enter into swap transaction.

Financial market took a bit of reprieve on Monday (20/08) after a volatile week due to the ongoing financial crisis in Turkey. This week, market participants are expected to stay on the sideline pending two key events, the release of US Fed minutes of meeting on Wednesday and a meeting between world’s top central bankers on Friday (18/08).

The Rupiah strengthened to 14,578 per US$ from 14,619 as tension over escalating trade war eased. The Jakarta Composite Index was up 1.9 per cent at 5,892.19 even as foreign investors pulled out Rp333 billion worth of equities.

As the popular tourist destination Lombok is still reeling from a series of strong earthquakes, which left more than 400 people dead, the Disaster Mitigation Agency has proposed for Rp700 billion for recovery plan.

The disaster took a political turn with the government refused to declare it as national disaster, which entails closing the island from tourist visits, among others. The opposition wasted no time to criticize the refusal, questioning the government’s priorities between helping the people and attracting tourists.

Hope you have a profitable day.

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