Tag: Indonesian

New Indonesian Law Is Boosting Asia’s Worst-Performing Currency

(Bloomberg) — The Indonesian rupiah has languished at the bottom of Asian currency rankings for most of the year but a recent overhaul of the nation’s investment law may help revive its fortunes.

The rupiah rose about 1% against the dollar last week after Indonesia approved its first omnibus law aimed at cutting red tape to boost investments and create jobs. That’s after a loss of 4.1% in the quarter ended September amid concern over Bank Indonesia’s independence, debt monetization and an economy poised for its first annual contraction since 1998.

“The passing of the omnibus labor law is good news for the rupiah as it’s a long-term structural reform that will improve the growth prospects of the economy,” said David Forrester, FX strategist at Credit Agricole CIB in Hong Kong. “We forecast USD/IDR to reach 14,500 by year end.”



graphical user interface, chart: Rupiah's 200-DMA continues to limit currency's gains


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Rupiah’s 200-DMA continues to limit currency’s gains

The rupiah, which traded at 14,700 against the dollar on Friday, has fallen 5.7% so far this year as Asia’s worst performer.

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Even though the rupiah failed to breach resistance at its 200-day moving average, support near 15,000 has held in the second half of the year aided by a burgeoning trade surplus, and Bank Indonesia’s support. Not only has the central bank intervened in the currency market, it has also left rates unchanged at its last two meetings.

Rupiah bulls will therefore be focusing on the central bank’s policy decision Tuesday, hoping that it continues to prioritize the currency’s stability over growth by keeping rates at present levels. All of the nine economists in Bloomberg’s survey forecast that BI will continue to be on hold.

Global risk sentiment still remains a risk for rupiah’s appreciation given 27% of the nation’s bonds are held by foreign investors. The virus spread is another concern as the nation reported the most number of cases last week since the start of the outbreak. And while investors have cheered the new investment law, workers have mounted protests on concerns it erodes their labor rights.

“The outlook for rupiah in the coming weeks will hinge on global risk sentiment given IDR is a high yielder in Asia,” said Irene Cheung, FX strategist at ANZ Banking Group Ltd. in Singapore. “On this front, the U.S. election will be a key watch given the high uncertainty and news flows.”

Below are the key Asian economic data and events due this week:

Monday, Oct. 12: Japan PPI and core machine orders, Malaysia industrial production, India CPI and industrial productionTuesday, Oct. 13: RBNZ’s Bascand speaks and New Zealand retail card spending, China trade balance, Bank of Indonesia rate decisionWednesday, Oct. 14: Australia consumer confidence, Japan industrial production, Bank of Korea rate decision, Singapore 3Q GDPThursday, Oct. 15: RBA’s Lowe speaks and Australian employment, China CPI and PPI, Indonesia trade balance, Philippine overseas remittances, India trade balanceFriday, Oct. 16: New Zealand businessNZ manufacturing PMI, Singapore non-oil domestic exports

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Indonesian Police Nab Thousands Protesting New Law, Antara Says

(Bloomberg) — Indonesia’s police detained thousands of protesters against the newly passed omnibus law, according to state news agency Antara, amid concern the gatherings could worsen the virus outbreak.

Students and workers held strikes and demonstrations across the country this week to reject the new law aimed at cutting red tape to boost investments, saying the bill would erode labor rights and environmental protection. President Joko Widodo defended the bill, saying the protests were fueled by “disinformation.”



a group of people standing around a fire: Indonesians Strike And Protest New Job Creation Law


© Photographer: Ed Wray/Getty Images AsiaPac
Indonesians Strike And Protest New Job Creation Law

Protestors throw rocks at a burning bus station in the city center in Jakarta, Indonesia on Oct. 8.

Photographer: Ed Wray/Getty Images

Here’s What to Know About Indonesia’s Investment Law Overhaul

Of the 3,862 people detained, 145 tested positive for the coronavirus, Antara reported, citing police spokesman Argo Yuwono.

The world’s fourth-most populous country is still struggling to contain the pandemic, adding more than 4,000 cases daily, with a record of 4,850 on Thursday. The total number of confirmed infections has tripled from the end of July to more than 320,000 and there have been 11,677 deaths.

The virus’s spread could be aided by poor understanding of the disease, with 17 out of 100 Indonesians saying it’s unlikely they would catch the virus, according to a September survey by the statistics bureau.

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Clashes erupt during demonstrations against new Indonesian jobs law

JAKARTA — Police and demonstrators clashed in the Indonesian capital on Thursday on the third day of protests and strikes against a polarising new jobs law passed in Southeast Asia’s largest economy earlier this week.

Hundreds of demonstrators gathered near the presidential palace in central Jakarta, shouting and throwing stones. Police fired tear gas and water cannon in an attempt to disperse the crowd, Reuters witnesses said.

The “omnibus” jobs creation bill, passed into law on Monday, has seen thousands of people across the world’s fourth-most populous nation take to the streets in protest against legislation they say undermines labour rights and weakens environmental protections.

“This is our struggle for our children and grandchildren, and our future generations… If it’s like this our well-being will decrease, and we will lack job certainty,” Maulana Syarif, 45, who has worked at Astra Honda motors for 25 years, told Reuters in Jakarta.

Demonstrators are seen next to a burning police station in Jakarta on Thursday.Willy Kurniawan / Reuters

Around 1,000 protesters have been detained in Jakarta and more than 100 others arrested in other cities, according to police spokespeople. At least two students have been hospitalised with head injuries, and six police officers hurt.

“I feel a responsibility to the Indonesian people,” said another demonstrator, IT student Arawinda Kartika, as she marched toward the palace. “I feel sorry for labourers working day and night without sufficient wages or power.”

Labour union leader Jumisi called for protests to continue until the law was repealed, extending unions’ initial plan for a three-day national strike ending Thursday.

Television channels showed demonstrations in multiple cities across the country, including in remote areas such as North Maluku, where people carried coffins and held mock funerals to mark the “death” of Parliament.

Black smoke rose across the capital on Thursday afternoon as protesters burned public transport facilities and damaged police posts. The operator of Jakarta’s MRT rail network said underground stations had been closed.

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Protesters blocked a toll road in West Java and set fire to a cafe in Yogyakarta province, media reported.

Two provincial governors urged the president to issue an emergency decree to cancel the law, they said in their social media accounts.

The government of President Joko Widodo has championed the legislation as key to boosting Indonesia’s ailing economy by cutting red tape and attracting more foreign direct investment.

Bahlil Lahadalia, the head of Indonesia’s Investment Coordinating Board, appealed to young people to trust the government’s intent.

“Please be assured this law is to create jobs for the unemployed Indonesian people,” he said.

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Indonesian Muslim and union groups to fight new jobs law in court

By Angie Teo and Tabita Diela

JAKARTA (Reuters) – Indonesian President Joko Widodo came under increasing pressure to repeal his new controversial labour law on Friday with union and Muslim groups preparing to challege it in court and some regional leaders publicly opposing the legislation.

The KSPI labour group, among the organisers of three-day national strikes ending Thursday, is preparing to lodge a case against the new law in the Constitutional Court, the group’s president Said Iqbal said in a statement.

Nahdlatul Ulama, Indonesia’s biggest Muslim group with millions of followers, would also challenge the law in the court, it said in its official Twitter account.

The “omnibus” jobs creation bill, passed into law on Monday, has seen thousands of people across the world’s fourth-most populous nation take to the streets in protest, saying it undermines labour rights and weakens environmental protections.

Clashes erupted in some cities on Thursday, including in the capital Jakarta where protesters burnt public transport facilities and damaged police posts.

At least five regional leaders, including the governors of Jakarta and the country’s most populous province West Java, have said they would pass on protersters’ demand to the president or publicly opposed the law

Repealing the law would prevent further clashes “that could create prolong instability amid a pandemic and an economic recession”, West Kalimantan Govenor Sutarmidji said in a statement.

The president has yet to make any public statement, but his ministers have defended the law, saying protests were triggered by false news and that the legislation would improve people’s welfare by welcoming more investment.

Jakarta police on Thursday detained about 1,000 demonstrators, but most of them were released by Friday morning, Jakarta police spokesman Yusri Yunus said.

Police did not expect a fourth day of protests in the capital on Friday, he said.

However, trade union KSBSI on Friday called on its members to launch another wave of protests from Oct. 12 to 16.

A meeting of many other labour groups is scheduled over the weekend to consolidate their next move, Ilhamsyah of KPBI labour union told Reuters.

Jakarta resident Nathan Tarigan feared clashes would escalate.

“I’m afraid if the government and stakeholders of the state aren’t wise, don’t want to listen, something bigger can happen and the state can break,” the 50-year-old said.

(Writing by Gayatri Suroyo; Editing by Michael Perry)

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Clashes erupt in protests against new Indonesian jobs law

By Agustinus Beo Da Costa and Willy Kurniawan

JAKARTA (Reuters) – Police and demonstrators clashed in the Indonesian capital Jakarta on Thursday on the third day of protests and labour strikes against a polarising new jobs law passed in Southeast Asia’s largest economy earlier this week.

Hundreds of demonstrators gathered near the presidential palace in central Jakarta, shouting and throwing stones. Police responded by firing tear gas and water cannon in an attempt to disperse the crowd, Reuters witnesses said.

The “omnibus” jobs creation bill, passed into law on Monday, has seen thousands of people across the world’s fourth-most populous nation take to the streets in protest against legislation they say undermines labour rights and weakens environmental protections.

“We ask that the law be repealed immediately,” Maulana Syarif, 45, who has worked at Astra Honda motors for 25 years, told Reuters in Jakarta. “This is our struggle for our children and grandchildren, and our future generations… If it’s like this (with the new law) our well-being will decrease, and we will lack job certainty.”

“I feel a responsibility to the Indonesian people,” said another demonstrator, IT student Arawinda Kartika, as she marched toward the palace. “I feel sorry for labourers working day and night without sufficient wages or power.”

In the past two days, almost 400 people have been detained in major cities, and two students hospitalised with serious head injuries, as protests have swept across the archipelago.

On Thursday, demonstrations were underway in almost a dozen cities across the country with television channels showing protests, including in remote areas such as North Maluku, where demonstrators carried coffins and held mock funerals for the ‘death’ of the parliament.

The government of President Joko Widodo has championed the flagship legislation as key to boosting Indonesia’s ailing economy by streamlining regulations, cutting red tape and attracting more foreign direct investment.

Met with cautious optimism by some financial analysts, the bill has sparked a significant outcry, with labour unions, students and academics criticising it for a lack of consultation, expedited passage, and problematic clauses they argue will disadvantage workers and the environment.

(Additional Reporting by Tabita Diela; Writing by Kate Lamb; Editing by Raju Gopalakrishnan)

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Indonesian police fire water cannons at protesters rallying against jobs law

Indonesian police used water cannons and tear gas on Tuesday to disperse protesters rallying against a new jobs law in two cities on the island of Java, according to a police spokesman and media reports.



a group of people standing in front of a crowd: Workers block a road during a strike against a government omnibus bill on job creation which they believe will deprive workers of their rights, in Bandung on October 6, 2020.


© TIMUR MATAHARI/AFP/Getty Images
Workers block a road during a strike against a government omnibus bill on job creation which they believe will deprive workers of their rights, in Bandung on October 6, 2020.

Earlier, thousands of workers and students had protested peacefully across the archipelago at the start of a three-day national strike against President Joko Widodo’s “omnibus” Job Creation bill, which was passed into law on Monday.

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Elshinta radio posted a video on its official Twitter account showing police late in the evening using water cannons against hundreds of protesters in the city of Serang in Banten province, about 70 km (43.5 miles) to the west of Jakarta.

Banten police spokesman Edy Sumardi Priadinata said via text message that the situation was under control by 9:15 pm local time and that two police officers had been injured by rocks thrown at them, but did not respond to further queries.

In Bandung, the capital of West Java province, police used tear gas against protesters who hurled rocks and fire crackers and damaged a police car, according to news website Detik.com.

The website also reported police had arrested 10 protesters.

The spokesman of West Java police could not immediately be reached for comment.

There was no significant demonstration in Jakarta. Police blocked workers from protesting in front of the national parliament, citing the need to contain the spread of the coronavirus.

Critics of the omnibus law, which revises more than 70 existing laws to accelerate reform of Southeast Asia’s largest economy, say it is too pro-business with its removal of labor protections and relaxation of environmental rules.

Government officials say the law relaxes rigid labor rules and streamlines environmental rules in order to improve the investment climate and create jobs.

Markets welcome law

Indonesian markets cheered the passage of the bill, with the main stock index up as much as 1.31% and the rupiah reaching as high as 1.28%, before paring some gains.

The Indonesia Investment Coordinating Board, a government agency, said it would lead to better welfare for workers by facilitating more foreign investment.

Citibank, in a research note, said the law simplifies business licensing and addresses restrictive trade and labor policies, but added that immediate foreign investment was unlikely in the currently depressed global economic climate.

Trimegah Securities economist Fakhrul Fulvian said banks and export-oriented industries should benefit from the law, while consumer and retail sectors may be pressured as workers may increase savings to compensate for changes in labor rules.

However, many Indonesians criticized the law on Twitter, with one trending hashtag incorporating an expletive against parliament and another calling lawmakers traitors.

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Thousands of students, workers protest new Indonesian law

BANDUNG, Indonesia (AP) — Thousands of Indonesian students and workers protested on Wednesday against a new law they say will cripple labor rights and harm the environment, with some clashing with police.



A labor demonstrator raises his fists in support of the protest against a controversial omnibus bill on job creation in Tangerang, Indonesia, Wednesday, Oct. 7, 2020. Thousands of students and laborers protested on Wednesday against the new law they say cripples labor rights and harms the environment. (AP Photo/Dita Alangkara)


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A labor demonstrator raises his fists in support of the protest against a controversial omnibus bill on job creation in Tangerang, Indonesia, Wednesday, Oct. 7, 2020. Thousands of students and laborers protested on Wednesday against the new law they say cripples labor rights and harms the environment. (AP Photo/Dita Alangkara)

Authorities in Bandung, the capital of West Java province, blocked streets leading to the local parliament building and city hall, where clashes between rock-throwing students and riot police broke out late Tuesday when police tried to disperse the protesters.



Indonesian workers march during a protest against a controversial omnibus bill on job creation, in Tangerang, Indonesia, Wednesday, Oct. 7, 2020. Thousands of Indonesian students and laborers protested on Wednesday against the new law they say cripples labor rights and harms the environment. (AP Photo/Dita Alangkara)


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Indonesian workers march during a protest against a controversial omnibus bill on job creation, in Tangerang, Indonesia, Wednesday, Oct. 7, 2020. Thousands of Indonesian students and laborers protested on Wednesday against the new law they say cripples labor rights and harms the environment. (AP Photo/Dita Alangkara)

On Wednesday, more than 3,000 protesters, including workers and high school and university students, attempted to reach the heavily guarded parliament building. Protesters set fires to tires near blocked streets.



Students burn a tire during a protest against a controversial omnibus bill on job creation in Tangerang, Indonesia, Wednesday, Oct. 7, 2020. Thousands of students and laborers protested on Wednesday against the new law they say cripples labor rights and harms the environment. (AP Photo/Dita Alangkara)


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Students burn a tire during a protest against a controversial omnibus bill on job creation in Tangerang, Indonesia, Wednesday, Oct. 7, 2020. Thousands of students and laborers protested on Wednesday against the new law they say cripples labor rights and harms the environment. (AP Photo/Dita Alangkara)

Smaller protests also occurred in other Indonesian cities, including in Jakarta’s satellite cities of Tangerang and Bekasi where large factories are located, and many cities on Sumatra and Sulawesi islands.

Thousands of workers from factories in West Java’s Karawang city and Serang town in Banten province also protested outside their factories.

Police in the capital, Jakarta, prevented labor groups from holding a mass rally in front of Parliament.

The new Job Creation Law, which was approved Monday, is expected to bring radical changes to Indonesia’s labor system and natural resources management. It amended 79 previous laws, including the Labor Law, the Spatial Planning Law and Environmental Management Law.



Students take part in a protest against a controversial omnibus bill on job creation in Tangerang, Indonesia, Wednesday, Oct. 7, 2020. Thousands of Indonesian students and laborers protested on Wednesday against the new law they say cripples labor rights and harms the environment. (AP Photo/Dita Alangkara)


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Students take part in a protest against a controversial omnibus bill on job creation in Tangerang, Indonesia, Wednesday, Oct. 7, 2020. Thousands of Indonesian students and laborers protested on Wednesday against the new law they say cripples labor rights and harms the environment. (AP Photo/Dita Alangkara)

It is intended to improve bureaucratic efficiency and cut red tape as part of efforts by President Joko Widodo’s administration to attract more investment in the vast archipelago nation, home to more than 270 million people.

Seven parties in the House of Representatives approved the legislation while two others rejected it, with their members walking out of the plenary session.

The Confederation of Indonesian Trade Unions, known as KSPI, said about 2 million workers representing 32 labor unions would take part in mass

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