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Government to Roll Out Eight New Structural Reform Policies

From Antara News
March 13, 2015

Eight new policies will be issued by RI Government to settle structural problems that have come in the way of reducing the current account deficit, Chief Economic Minister Sofyan Djalil stated here on Friday.

Sofyan stated that the policies were answers to the negative response from financial market players with regard to the external pressure that has led the rupiah exchange rate to depreciate up to Rp13.2 thousand against the US dollar.

He stated that the government will issue an economic policy to improve the performance of balance of trade in the service sector, which has, so far, been the biggest contributor to the deficit. The eight policies to be issued by the government include a finance ministerial regulation that regulates the flexibility of Provisional Anti-Dumping Tax and Provisional Security Import Tax to boost competitiveness of domestic products.

To boost direct foreign and domestic investment, other upcoming rule is revision of Governments Regulation Number 52 of 2011 on tax allowance and tax holiday initiative. He noted that the government will also issue a policy to boost the use of biofuel to higher than the current set norm of 10 percent and will also prepare a value-added tax scheme for domestic shipping industries to improve their competitiveness.

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Kalla said the main reason to move the new port’s location to another regency was because waters in the area were already crowded by offshore mining activities and oil tankers transporting crude oil to Jakarta and other cities.

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Analysts said stronger inflation would limit Indonesia’s central bank’s ability to further reduce its key interest rate. The BPS announced March’s headline inflation rate was 6.38 percent, compared with 6.29 percent a month earlier.

“This is broadly in line with our forecast and the consensus median,” said Dian Ayu Yustina, a Jakarta-based economist with Bank Danamon Indonesia.

The administration of President Joko Widodo has reformed the fuel price policy to a regulated price that can fluctuate according to the global oil price and the exchange rate.
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