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Today's Headlines Bank Indonesia

  • When Will Indonesia's Current Account Record a Surplus Again?

    When Will Indonesia's Current Account Record a Surplus Again?

    Indonesia's current account balance is expected to show a deficit for the next five years. The central bank of Indonesia (Bank Indonesia) does not rule out a surplus within that period but it would require some serious work in terms of structural reform-making. Indonesia started to record current account deficits in late-2011 due to the ballooning oil import bill (before the government slashed energy subsidies) and weak commodity prices after 2011.

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  • Bank Indonesia Estimates GDP Growth at 5.05% in 2017, 6% by 2022

    Bank Indonesia Estimates GDP Growth at 5.05% in 2017, 6% by 2022

    The central bank of Indonesia (Bank Indonesia) stated on Thursday (28/12) that it expects to see Indonesia's economic growth at 5.05 percent year-on-year (y/y) in full-year 2017, up modestly from 5.02 percent (y/y) in the preceding year. Bank Indonesia Governor Agus Martowardojo said the Indonesian economy is recovering unevenly yet gradually.

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  • Bank Indonesia Keeps Key Interest Rate at 4.25% in December 2017

    Bank Indonesia Keeps Key Interest Rate at 4.25% in December 2017

    Bank Indonesia, the central bank of Indonesia, left its benchmark interest unchanged at the final (regular) policy meeting of 2017. The BI 7-day Reverse Repo Rate was kept at 4.25 percent on Thursday (14/12). Meanwhile, the deposit facility and lending facility were kept at 3.50 percent and 5.00 percent, respectively (effective per 15 December 2017).

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  • Indonesian Rupiah May Weaken Ahead of Looming Fed Rate Hike

    Approaching the Federal Open Market Committee (FOMC) meeting - scheduled for 12-13 December 2017 - the Indonesian rupiah exchange rate remained stable on Monday (11/12). By 15:00 pm local Jakarta time, the rupiah had strengthened 0.01 percent to IDR 13,548 per US dollar (Bloomberg Dollar Index). However, several analysts warn that the rupiah is likely to depreciate if the US Federal Reserve will indeed raise its benchmark interest rate.

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  • Foreign Exchange Reserves Indonesia Fall in November 2017

    Foreign Exchange Reserves Indonesia Fall in November 2017

    Indonesia's foreign exchange reserves fell in November 2017. At the end of November the nation's foreign exchange reserves stood at USD $125.97 billion, down from USD $126.55 billion at the end of the preceding month. Despite the decline, the exchange assets can still adequately cover 8.4 months of imports or 8.1 months of imports and servicing of government external debt repayments, well above international standards at 3 months of imports.

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  • Can Bank Indonesia Leave Its Key Rate Unchanged in December?

    Can Bank Indonesia Leave Its Key Rate Unchanged in December?

    The central bank of Indonesia (Bank Indonesia) will conduct its final monthly policy meeting for 2017 on 13-14 December. Based on statements made by Bank Indonesia Deputy Governor Dody Budi Waluyo on Wednesday (06/12) at Bloomberg's Year Ahead Asia Conference, the benchmark interest rate of Indonesia will likely remain unchanged at 4.25 percent at this year's final policy meeting.

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  • Bank Indonesia to Ban Bitcoin Payment Transactions in 2018

    Bank Indonesia to Ban Bitcoin Payment Transactions in 2018

    The central bank of Indonesia (Bank Indonesia) will soon issue a new regulation in which it bans the use of bitcoin for domestic payments starting from 2018. Bitcoin is a (virtual) digital currency that is traded at cryptocurrency exchanges for fiat currencies. According to Bank Indonesia, however, the use of bitcoin undermines the sovereignty of the Indonesian rupiah.

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  • Moody's Advises Bank Indonesia to Pause Monetary Easing Drive

    Moody's Advises Bank Indonesia to Pause Monetary Easing Drive

    Today, the central bank of Indonesia (Bank Indonesia) decided to keep its key interest rate - the seven day reverse repo rate - at 4.25 percent, a decision that had been expected by most - if not all - analysts as there have been rising pressures on the rupiah exchange rate after two surprise rate cuts in August and September, while there remain plenty of external matters that make investors careful about investing in emerging market assets.

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  • Bank Indonesia Kept Key Interest Rate at 4.25% in October 2017

    Bank Indonesia Kept Key Interest Rate at 4.25% in October 2017

    Bank Indonesia held its key rate at 4.25 percent at the October 2017 policy meeting. This decision was in line with expectations. In fact, previously, Bank Indonesia officials had already indicated that they would pause their eagerness to ease monetary policy. Since January 2016, the central bank of Indonesia had already cut the benchmark interest rate eight times from 7.25 percent to 4.25 percent in an effort to boost economic growth.

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Latest Columns Bank Indonesia

  • Bank Indonesia: Balance of Payments Surplus at $4.5 billion in Q4-2016

    Bank Indonesia: Balance of Payments Surplus at $4.5 billion in Q4-2016

    Bank Indonesia, the central bank of Indonesia, announced on Friday (10/02) that Indonesia's balance of payments surplus reached USD $4.5 billion in the fourth quarter of 2016 as the capital and financial accounts' surplus managed to (more than) compensate for the USD $1.8 billion current account deficit (or 0.8 percent of the country's gross domestic product/GDP) in the same quarter. Regarding full-year 2016, Indonesia posted a USD $12.1 billion surplus in its balance of payments, while its current account deficit was equivalent to 1.8 percent of GDP.

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  • Foreign Loan Restrictions and Reporting Obligations in Indonesia

    Foreign Loan Restrictions and Reporting Obligations in Indonesia

    A company that wishes to obtain a foreign loan in foreign currency of more than USD 100,000 is required to fulfill certain requirements set by Bank Indonesia (BI). These requirements are set in BI Regulation 16/21/PBI/2014 concerning The Implementation Of Prudential Principles in Managing External Debt of Non-Bank Corporation and amendment 18/4/PBI/2016 (BI Regulation). Further explanation is provided in the BI Circular number 16/24/DKEM of 2014 and its amendment number 17/18/DKEM of 2015. In this column we will discuss the reporting requirements for foreign loans of more than USD 100,000.

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  • Bank Indonesia Kept Interest Rates Unchanged on Capital Outflow Risk

    Bank Indonesia Kept Interest Rates Unchanged on Capital Outflow Risk

    The central bank of Indonesia (Bank Indonesia) decided to leave its interest rate environment unchanged at the January 2017 policy meeting on Thursday (19/01). The benchmark seven-day reverse repurchase rate (BI 7-day RR Rate) was kept at 4.75 percent, while the Deposit Facility and Lending Facility rates were maintained at 4.00 percent and 5.50 percent, respectively. The decisions of Bank Indonesia are in line with analysts' forecasts. Due to risks of capital outflows Indonesia's central bank had few room to ease monetary policy.

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  • Impact of Fed's Interest Rate Hike on the Value of Indonesia's Rupiah

    Impact of Fed's Interest Rate Hike on the Value of Indonesia's Rupiah

    Stock markets in Asia are mixed, yet tepid on Friday (16/12) after the US Federal Reserve raised its interest rate regime for the second time in a decade on Wednesday (14/12). Although the Fed's move was widely anticipated (and therefore already "priced in" to a high degree) it still resulted in some capital outflows from Asia's stock markets on Thursday (13/12). Japan, as usual, is the notable exception as US dollar strength (or yen weakness) makes Japan's export-oriented stocks more attractive.

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  • Bank Indonesia Keeps Interest Rate Unchanged at December Meeting

    Bank Indonesia Keeps Interest Rate Unchanged at December Meeting

    Bank Indonesia, the central bank of Indonesia, kept its benchmark interest rate unchanged at the December 2016 policy meeting, nearly a day after the US Federal Reserve decided to raise its key Fed Funds Rate by 25 basis points to the range 0.50 - 0.75 percent. Moves of both central banks were expected. Monetary tightening in the USA triggers capital outflows from emerging markets (the Indonesian rupiah depreciated around 0.70 percent against the US dollar on Thursday). Therefore, Bank Indonesia had little room to seek monetary easing.

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  • Bank of Indonesia: Assessing Impact of Sudden Rate Cut

    Bank of Indonesia: Assessing Impact of Sudden Rate Cut

    The Bank of Indonesia recently resorted to a sudden cut in interest rate (by 25 bps to 4.75 percent) at its 20th October 2016 meeting. This followed a 25 bps reduction in September and thus this is the sixth time this year that the Indonesian central bank has elected to loosen monetary policy.

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  • Bank Indonesia Kept 7-Day Reverse Repo Rate at 4.75% in November

    Bank Indonesia Keeps 7-Day Reverse Repo Rate at 4.75% in November

    In line with expectations Indonesia's central bank (Bank Indonesia) kept its benchmark reference rate - the BI 7-Day (Reverse) Repo Rate - at 4.75 percent at Thursday's policy meeting (17/11). This decision was made amid the high degree of uncertainty in global financial markets (triggered by the 2016 US presidential election) and stable domestic conditions (low inflation and an improving current account deficit). The high degree of volatility does cause major pressures on the rupiah and therefore Bank Indonesia will continue to stabilize exchange rates through intervention in markets.

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  • Bank Indonesia Ending the Era of High Interest Rates?

    Bank Indonesia Ending the Era of High Interest Rates?

    Bank Indonesia (BI) is the central bank of the Republic of Indonesia, and was known as "De Javasche bank" or "The Java Bank" in the colonial period.  Bank Indonesia was founded on 1 July 1953 from the nationalization of De Javasche Bank. As an independent state institution, Bank Indonesia is fully autonomous in formulating and implementing each of its assumed tasks and most policy goals tend to center around the ability to stabilize prices in the economy.

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  • Bank Indonesia Cut Interest Rates Again in October 2016

    Bank Indonesia Cut Interest Rates Again in October 2016

    Bank Indonesia surprised markets. On Thursday (20/10) the central bank of Southeast Asia's largest economy cut its benchmark interest rate - the BI 7-day reverse repo rate - by 25 basis points to 4.75 percent. Meanwhile, both the deposit facility and lending facility were also cut by 25 basis points to 4.00 percent and 5.50 percent, respectively. Perhaps it was Bank Indonesia's present to Indonesian President Joko Widodo for the two-year anniversary of his government. A lower interest rate climate should encourage macroeconomic expansion.

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  • Analysis Indonesian Economy: GDP, Monetary Policy & Stability

    Analysis Indonesian Economy: GDP, Monetary Policy & Stability

    The central bank of Indonesia (Bank Indonesia) has become slightly less optimistic about Indonesia's economic growth in the third quarter of 2016. Bank Indonesia revised down its growth projection to below the 5 percent (y/y) mark for Q3-2016 (from an earlier forecast of 5.2 percent). However, the lender of last resort still expects to see a better performance compared to the 4.73 percent (y/y) pace posted in Q3-2015. Meanwhile, low inflation and a strong rupiah could result in another interest rate cut in Southeast Asia's largest economy.

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