KBI Strengthens Futures Market Stability in the Face of Trade War Escalation in 2025

10 Apr 2025

The reciprocal import tariff policy announced by US President Donald Trump's administration in early April has triggered significant turmoil in global commodity markets, especially in strategic commodities such as gold. As a clearing house for futures trading, PT Kliring Berjangka Indonesia (PT KBI) recorded a surge in strategic commodity transaction volumes amid geopolitical and economic uncertainty.

The US import tariff policy of 32% for Indonesia and up to more than 100% for certain products from China has disrupted global supply chains, prompting investors to turn to safe-haven assets such as gold and physical commodities. The following is the latest data observed in the Indonesian market during Q1 2025:

The overall London Loco Gold Transaction Volume on the Jakarta Futures Exchange (JFX) increased 20.2% yoy to total 1,491,864 lots (Q1 2025) compared to 1,240,323 lots (Q1 2024).

The driving factor for the data is the uncertainty of the Rupiah exchange rate against the USD as well as hedging demand from industry players. Currently, Indonesia is facing the unique challenge of a “Currency-Commodity Double Squeeze,” where rising Gold Prices are triggered by global safe-haven demand and a Strengthening USD against the Rupiah. This combination increases inflationary pressure and import costs in various industrial sectors.

In response, as reported by Bloomberg Technoz, Bank Indonesia (BI) has activated a "Triple Intervention Instrument" to maintain Rupiah stability: Intervention in the forex market, Adjustment of benchmark interest rates, and Optimization of foreign exchange reserves. In line with this, as a clearing house, PT KBI implements a real-time monitoring system to ensure futures market operations using Intra-Day Margin, where margins are calculated based on the last price at JFX and clearing members are encouraged to top-up margins in the event of a shortage.

Budi Susanto, President Director of PT KBI, emphasized: "We have anticipated this turmoil by strengthening operational monitoring of margin fulfillment in real time using Intra Day Margin every 2 (two) hours. In Futures Trading, the price fluctuations that are currently occurring are a good opportunity that can be utilized by industry players. The direct impact of these price fluctuations is an increase in Loco London gold transactions, this also reflects investor confidence in safe-haven instruments amid market uncertainty. PT KBI in this case will continue to be committed to supporting financial system stability through a transparent, responsive and reliable clearing mechanism."

LOCO LONDON CONTRACT TRANSACTION VOLUME TABLE DATA [PERIOD 1 JAN - 31 MAR 2024 versus 2025]

PT KBI continues to coordinate with relevant authorities, including the Commodity Futures Trading Supervisory Agency (BAPPEBTI), Bank Indonesia (BI), and the Financial Services Authority (OJK) to mitigate systemic risk in the Futures Market. This effort is in line with the BUMN mission to encourage inclusive and globally competitive economic growth in Indonesia.