First Read: Indonesia Market Strategy "BI Rate Hike, Sole Exporter for S..."

Research evidence excerpt

First Read: Indonesia Market Strategy "BI Rate Hike, Sole Exporter for S..."

Global Research

20 May 2026ab

First Read

Equity StrategyIndonesia Market Strategy

BI Rate Hike, Sole Exporter for Strategic Indonesia

Commodity Exports Joshua Tanja, CFA Analyst

joshua.tanja@ubs.com

+62-21-2554 7030

BI delivered a surprise 50bp rate hike Ivan Reynaldo Sutheja

We believe this is a signal that in the trade off between price (including Rupiah) stability Analyst

ivan-reynaldo.sutheja@ubs.comand growth, Indonesia authorities including the government now see increased priority

+62-21-2554 7037

of the former. For the big banks, in particular Bank Central Asia, the policy direction

should help its margin outlook. In our estimate, every 100bp higher policy rate implies Elisabeth Angelina Inggriani

20bp NIM improvement. Associate Analyst

elisabeth-angelina.inggriani@ubs.com

+62-21-2554 7006

New governance of strategic commodity export

In a parliamentary plenary session today, Indonesia introduced a new Government

Regulation on the Governance of the Strategic Commodity Export. In essence, strategic

natural resources exports starting with palm oil, coal and ferro-alloys (which we believe

include nickel) would be conducted through an SOE (Danantara Sumberdaya

Indonesia) designated by the government as sole exporters. Implementation starts on

June 1, with full transition targeted by September 1 2026. The objective is to strengthen

supervision and eradicating practices of under-invoicing, transfer pricing and

embezzlement of export proceed which had contributed to region low 11% revenue/

gdp. Note that this new export rule is on top of June 1 start day of a new DHE (Devisa

Hasil Export) regulation that requires 100% of the revenue from in-scope commodity