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Today's Headlines Bank Indonesia

  • Renewed Pressures Push Indonesia's Rupiah to IDR 14,550 per US Dollar

    Renewed Pressures Push Indonesia's Rupiah to IDR 14,550 per US Dollar

    The Indonesian rupiah had been fairly stable against the US dollar since Bank Indonesia's aggressive 0.50 percent rate hike in late-June (a move that caught many by surprise). However, after the central bank of Indonesia decided to leave its benchmark interest rate unchanged at the July policy meeting (which was concluded on Thursday, 19/07), the rupiah has become under heavy pressure again.

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  • Bank Indonesia Leaves Key Interest Rate Unchanged in July 2018

    Bank Indonesia Leaves Key Interest Rate Unchanged in July 2018

    In line with expectations the central bank of Indonesia (Bank Indonesia) kept its benchmark interest rate (the 7-day Reverse Repo Rate) at 5.25 percent at the two-day July policy meeting (concluded on Thursday 19 July 2018). Meanwhile, the deposit facility and lending facility rates were kept at 4.50 percent and 6.00 percent, respectively.

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  • Current Account Deficit Indonesia Expected to Widen to 2.5% of GDP

    Current Account Deficit Indonesia Expected to Widen to 2.5% of GDP

    The current account deficit of Indonesia could widen to 2.5 percent - or more - of the nation's gross domestic product (GDP) in the second quarter of 2018 according to Bank Indonesia's Senior Deputy Governor Mirza Adityaswara. He added that a current account deficit below 3 percent of GDP is still in the safe zone. Dividend payouts are expected to put additional pressure on the Q2-2018 current account deficit of Indonesia.

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  • Indonesia's Foreign Exchange Reserves Tumble for 5th Straight Month

    Indonesia's Foreign Exchange Reserves Tumble for 5th Straight Month

    The central bank of Indonesia (Bank Indonesia) announced that the nation's foreign exchange reserves had fallen to USD $119.8 billion (per end June 2018), thus declining USD $3.1 billion compared to the position in the preceding month. As such, the recent trend continued: Indonesia's foreign exchange assets have now fallen for five straight months after touching a record high of nearly USD $132.0 billion in January 2018 (see table below).

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  • A Closer Look at Bank Indonesia's Latest LTV Ratio Relaxation

    A Closer Look at Bank Indonesia's Latest LTV Ratio Relaxation

    At the latest policy meeting (29/06) Bank Indonesia decided to relax the loan-to-value (LTV) and financing-to-value (FTV) ratios in the country's property sector (effective per 1 August 2018). By lowering down payment obligations for the consumer, the central bank aims to make it more attractive for consumers to purchase property using House Ownership Credit (Kredit Pemilikan Rumah, KPR), hence boosting overall credit growth as well as Indonesia's macroeconomic growth.

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  • Bank Indonesia Raises Key Interest Rate by 50 bps to 5.25%

    Bank Indonesia Raises Key Interest Rate by 50 bps to 5.25%

    As we had predicted this morning, Bank Indonesia decided to raise its benchmark interest rate by 50 basis points (bps) to 5.25 percent at the two-day June policy meeting that was concluded earlier today. Presumably markets had been expecting a 25 bps rate hike (therefore being priced in already) and therefore the central bank of Indonesia possibly felt it had to take a more aggressive approach to defend the Indonesian rupiah that had weakened beyond the IDR 14,400 per US dollar level.

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  • Market Participants Await Bank Indonesia's Policy Decision

    Market Participants Await Bank Indonesia's Policy Decision

    The Indonesian rupiah continues to slide on Friday (29/06) and is now hovering around the IDR 14,400 per US dollar level. The weak rupiah reaffirms analysts' expectations of seeing another interest rate hike. Today, the central bank of Indonesia (Bank Indonesia) will conclude its June policy meeting. But perhaps the crucial question is not "will Bank Indonesia raise its benchmark rate?" Possibly the more crucial questions are "by how much will it raise its rate?" and "what other policies will it implement to strengthen rupiah stability as well as financial stability?"

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  • Stocks & Currency Update Indonesia: Jakarta Composite Index & Rupiah

    Stocks & Currency Update Indonesia: Jakarta Composite Index & Rupiah

    Asian stocks and emerging market currencies continue to be under pressure on Thursday morning (28/06) amid uncertainty regarding US authorities' stance on Chinese investment in US tech companies, ongoing concerns over the impact of simmering global trade woes on economic growth, and rising crude oil prices. However, as we approach the lunch break there are some signs of a rebound in Asian markets.

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  • Bank Indonesia Delays June Monthly Policy Meeting by One Day

    Bank Indonesia Delays June Monthly Policy Meeting by One Day

    Earlier this week, Wednesday 27 June 2018 was declared a public national holiday by the Indonesian government through Presidential Decision No. 48/2018. Reason being the local elections that are held in 171 regions across Indonesia. A free day would provide more opportunities for workers to cast their vote. Earlier, the Indonesia Stock Exchange had already confirmed that it would operate as usual on this regional election day.

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  • Foreign Exchange Reserves Indonesia Fell Further in May 2018

    Foreign Exchange Reserves Indonesia Fell Further in May 2018

    The central bank of Indonesia (Bank Indonesia) announced that the nation's official foreign exchange reserves stood at USD $122.9 billion at the end of May 2018, down from USD $124.9 billion in the preceding month. The decline, which had been expected, was mainly due to the use of foreign exchange to repay public foreign debt and to stabilize the Indonesian rupiah amid persistently high uncertainty in global financial markets.

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Latest Columns Bank Indonesia

  • Deflation or Inflation in September? Bank Indonesia vs Statistics Indonesia

    Deflation or Inflation in September? Bank Indonesia vs Statistics Indonesia

    Indonesia's central bank, Bank Indonesia, expects deflation of about 0.9 percent in September 2013. Statistics Indonesia, on the other hand, believes there will be limited inflation this month. Both institutions agree, however, on a forecast of at least 9 percent of inflation over full-year 2013. The bank's September forecast is based on a survey that was conducted in the second week of September. This survey showed that food commodities and government administered prices eased.

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  • Bank Indonesia Plans New Rule to Avert Possible Property Bubble

    Bank Indonesia Plans New Rule to Avert Possible Property Bubble

    In order to avert a potential bubble in Indonesia's property sector, Bank Indonesia (the central bank of Indonesia) is planning to further tighten its monetary policy in the sector. After having raised the minimum down payment requirement on housing loans to 30 percent for first home ownership (thus a loan-to-value ratio of 70 percent) in June 2012, Bank Indonesia now intends to prohibit credits for the purchase of a second, third (or more) house that has not been built yet (still in the preconstruction phase). This new rule is expected to be introduced this month.

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  • Investors Waiting for Federal Reserve Decision; Indonesia's IHSG Down 1.20%

    Market participants are waiting for the outcome of the Federal Reserve's FOMC meeting, which will deal with the future of the quantitative easing program. The wait and see attitude of investors made the benchmark index of Indonesia (IHSG) fall 1.20 percent to 4,463.25 points. Few big cap stocks were able to rise and although some second liners were up, it was not enough to push the IHSG into the green zone. The rupiah continued to weaken and foreign investors were again mostly selling their Indonesian assets.

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  • Indonesia's Benchmark Stock Index Up 3.35% amid Rising Asian Indices

    Rising indices on Wall Street at the end of last week were a major factor behind rising stock indices in Asia, including Indonesia's benchmark stock index (IHSG), on Monday (16/09). For market players this development was a sign to enter the market. Moreover, expectation has emerged that the Federal Reserve will not take any drastic decisions in the FOMC meeting (on 17-18 September) regarding its quantitative easing program. This expectation has calmed down markets. Indonesia's IHSG rose 3.35 percent to 4,522.54 points.

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  • Indonesia's Benchmark Stock Index (IHSG) up 0.17% on Thursday

    Despite concerns that Indonesia's benchmark stock index (IHSG) would weaken on Thursday's trading day (12/09), the index ended 0.17 percent up to 4,356.61 points. Indices on Wall Street and in Asia impacted positively on the IHSG and kept foreign investors increasing their stock portfolios in Indonesia. Moreover, the Bank Indonesia's decision to raise the country's benchmark interest rate (BI rate) by 25 basis points to 7.25 percent was generally well-received by investors. Banking stocks helped to support the IHSG.

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  • Official Press Release of Bank Indonesia: BI Rate up 25 bps to 7.25%

    It was decided at the Board of Governors’ meeting (RDG) of Bank Indonesia on 12 September 2013 to raise the BI Rate by 25 bps to 7.25%, the rate on the Lending Facility by 25 bps to 7.25% and the rate on the Deposit Facility by 25 bps to 5.50%. This action forms part of the follow-up measures taken to reinforce the policy mix instituted by Bank Indonesia, which focuses on controlling inflation, stabilizing the rupiah exchange rate and ensuring the current account deficit is managed to a sustainable level.

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  • Indonesia's IHSG Stock Index Falls Slightly on Wednesday amid Profit Taking

    Without any real negative global reasons, Indonesia's benchmark stock index (IHSG) was down 0.20 percent to 4,349.42 points. Apparently, market participants were looking for profit taking after the index rose sharply in the last couple of days. There may also have been the psychological influence of the gaps at 4,191-4,225 and 4,072-4,102 that still need to be closed. Will the IHSG close these? Compared to the general upward trend of Asian indices, it seems strange if the IHSG would deviate from this trend only to close the gaps.

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  • Fitch Ratings: Major Indonesian Banks Resilient Against Market Turmoil

    Fitch Ratings: Major Indonesian Banks Resilient Against Market Turmoil

    According to global credit rating and research agency Fitch Ratings, Indonesia's major banks are robust against the rupiah currency slide due to their low unhedged foreign currency exposure, strong loss-absorption cushions and - in some cases - foreign ownership. The slowdown in the economy will weigh on these (rated) banks' operating environment, but is unlikely to damage their credit profiles to any great extent. Below we provide Fitch Ratings' report. This report can also be accessed on their website.

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  • High July Trade Deficit Causes Indonesia's Stock Index to Fall 2.23%

    Indonesia's benchmark stock index (IHSG) went down 2.23 percent on Monday (02/09) after Statistics Indonesia (BPS) released a number of macroeconomic data. The country's inflation pace increased to 8.79 percent year-on-year, while it posted a record monthly trade deficit in July 2013 (USD $2.31 billion). Investors have been highly concerned about the development of Indonesia's current account deficit and after it became known that the figure was high in July, the IHSG quickly lost value.

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  • Indonesia Stock Exchange (IHSG) Extends 'Winning Streak' on Friday

    The decision of Indonesia's central bank (Bank Indonesia) to raise its benchmark interest rate by 50 basis points to 7.00 percent and its deposit facility (Fasbi) by 0.50 percent to 5.25 percent seem to have had a good impact on the value of Indonesia's stocks and the rupiah. Indonesia's benchmark stock index (IHSG) rose 2.23 percent to 4,195.09 points on Friday (30/08), implying a three-day winning streak. Since the first trading day of this year, the IHSG is down 3.47 percent.

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