Indonesia to build trustworthy commodity exchange, nominee Sarjito says

Indonesia is set to launch a new minerals and strategic commodity exchange on January 1, a move designed to give the resource-rich nation greater influence over global commodity prices. The government aims to establish an infrastructure that is trusted, transparent, fair, and orderly from its first transaction.

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People will always assess the market, whether it is transparent, fair, orderly, liquid, or not.

Sarjito, the sole candidate nominated by President Prabowo Subianto to regulate the exchange, emphasized the importance of market integrity during a parliamentary hearing. He stated that a lack of depth or integrity would deter industry players and traders. Sarjito, a former deputy commissioner at the financial services authority (OJK), requires parliamentary approval for the role of chief supervisor of commodity trading.

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If the market is not deep, has no integrity, industry players and traders would not trust it.

He stressed that the OJK, the bourse, clearing agencies, warehouses, and other stakeholders must collaborate to build market trust. "The exchange does not have to become huge on its first day, but it has to be trusted from the first transaction," Sarjito told lawmakers. His nomination comes as Indonesia, the world's largest exporter of thermal coal, palm oil, and nickel, seeks to leverage its significant position in global markets for commodities like tin, copper, bauxite, and coffee beans.

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The exchange does not have to become huge on its first day, but it has to be trusted from the first transaction.