Indonesia launches Gold ETF to strengthen bullion market

Indonesia has officially launched a Sharia-compliant Gold Exchange-Traded Fund (ETF) on the Indonesia Stock Exchange (IDX). The instrument is designed to expand the nation's bullion market and deepen capital sector liquidity. Pegadaian serves as the sole underlying provider, utilizing Electronic Gold Receipts (EGR) to represent physical gold assets.

Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the Gold ETF aims to strengthen Indonesia's position as a regional gold investment hub, potentially competing with markets in India and Singapore. He noted that national gold reserves managed by Pegadaian have grown significantly, reaching approximately 153 tons, with a potential investment value of $20 billion. To further support this ecosystem, the government is preparing tax incentives to ensure the ETF is treated similarly to other securities.

Separately, Airlangga addressed energy security, confirming that supplies of Pertalite and biodiesel remain secure through the end of the year. Despite global geopolitical tensions in Ukraine and the Middle East, Indonesia's average oil purchase price of approximately $91 per barrel provides a buffer against significant domestic price volatility. He also highlighted the country's strong economic fundamentals, including a stable investment grade rating and disciplined fiscal management.