Indonesia

Indonesia’s central bank tapped tools other than interest rates to help the rupiah weather an emerging-market selloff triggered by the prospect of tighter US monetary policy, Bloomberg News reported. Bank Indonesia Thursday kept the benchmark seven-day reverse repurchase rate at a four-year high of 5.75%. While the decision was widely expected, Governor Perry Warjiyo announced a new tool to attract foreign funds to support the local currency. The decision came as data compiled by Bloomberg showed investors sold $127 million worth of Indonesian bonds so far this August.

The Indonesian government is reviewing a plan to merge state-owned airlines Garuda Indonesia and Pelita Air, a unit of energy firm Pertamina, to ensure affordable airfares, an executive said on Tuesday, Reuters reported. The plan came a year after Garuda reached an agreement with its creditors to restructure its $9 billion debt.

Distressed state construction company PT Waskita Karya of Indonesia said it won’t be able to deposit funds for the payment of interest and the repayment of principal for its rupiah bonds due Aug. 6, according to a filing on Friday, Bloomberg News reported. The rupiah-denominated notes of the heavily indebted builder has total outstanding of 135.5 billion rupiah ($8.9 million), according to data compiled by Bloomberg. The failure to make payments came after the company also missed a coupon payment due May 30, Waskita said in a statement.

Indonesia is drawing on the structure of the stock market to revamp crypto trading and mitigate the risks exposed by the collapse of the FTX digital-asset exchange, Bloomberg News reported. A key plank of the plan is a proposed state-backed crypto bourse where private-sector platforms will execute trades, according to the Commodity Futures Trading Regulatory Agency, which currently oversees digital assets. “The hard part is we can’t find a benchmark for such a crypto bourse,” the agency’s head Noordiatmoko said in an interview.

Indonesian furniture retailer Fabelio has declared bankruptcy, announcing the move through local media. This comes after a Jakarta commercial court reached a verdict on October 5, TechinAsia.com reported. “I declare the debtor [Fabelio] in a state of bankruptcy with all the legal consequences,” Gde Braga Abi Tamara, the startup’s legal curator, told Bisnis Indonesia. On behalf of Fabelio, the curator will handle all of the company’s confiscated assets and then sell them to pay off debts.

PT Garuda Indonesia on Friday filed for chapter 15 bankruptcy protection in the Southern District of New York court, as the debt-laden carrier tries to secure its future profitability, Bloomberg News reported. The submission comes as the airline, having completed a court-supervised debt restructuring in Indonesia to halve reduce its debt load, tries to capitalize on the rebound in international travel. Garuda’s total debt now amounts to roughly $5.1 billion, President Director Irfan Setiaputra told parliament in Jakarta on Monday.

Garuda Indonesia can look forward to almost US$400 million in net profit next year and more in the following years, the government forecasts, pointing to a turnaround for the debt-laden national flag carrier, The Star reported. Following years of hefty losses, the airline operator would achieve $399 million in profit, which would increase to $647 million in 2026, according to the Finance Ministry’s projection.

Indonesia’s central bank unexpectedly raised borrowing costs for the first time since 2018 as policy makers conceded that inflation pressures have risen, revising their price forecasts higher, Bloomberg News reported. Bank Indonesia raised its seven-day reverse repurchase rate by 25 basis points to 3.75% on Tuesday, a move predicted by only seven of 31 economists in a Bloomberg survey. BI raised its forecasts for headline and core inflation this year and said it sees risks that average price gains could exceed the 2%-4% target not just this year but also in 2023.

Just one month after being declared free from bankruptcy, Indonesian flag carrier Garuda Indonesia announced Friday that it had added three Boeing 737-800 NG aircraft to its operation and would increase its flight frequency by 32 percent in August, xinhuanet.com reported. "This strategy aims to optimize the company's performance. We need to continue boosting operational capacity and restructure the company," Garuda Indonesia President Director Irfan Setiaputra said in a statement.