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Today's Headlines Bank Indonesia

  • Bank Indonesia: Spike in Food Commodity Prices, Inflation Rising

    Bank Indonesia: Spike in Food Commodity Prices, Inflation Rising

    Indonesia's inflation is expected to accelerate in January 2016 according to the country's central bank (Bank Indonesia). Bank Indonesia detected a spike in prices of several food commodities - such as shallots, chili, and beef - at the start of the year. Bank Indonesia Governor Agus Martowardojo told reporters that he expects the country's inflation rate to rise by around 0.75 percent month-on-month (m/m) in January. This would imply that inflation will accelerate to 4.38 percent on an annual basis (from 3.35 percent y/y in December 2015).

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  • Bank Indonesia Cuts Interest Rate (BI Rate) to 7.25% in January

    Bank Indonesia Cuts Interest Rate (BI Rate) to 7.25% in January

    Although global media focus on the vicious terrorist attacks that occurred today in Jakarta, the country's central bank (Bank Indonesia) made a surprise move by cutting its key interest rate (BI rate) by 25 basis points to 7.50 percent at the January policy meeting. It is a surprise as Bank Indonesia emphasized repeatedly that it is primarily focused on rupiah stability while - amid severe market volatility (due to economic turmoil in China) - the rupiah remains under pressure.

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  • Bank Indonesia Should Keep BI Rate at 7.50% due to Fragile Rupiah

    Bank Indonesia Should Keep BI Rate at 7.50% due to Fragile Rupiah

    On Wednesday (13/01) Indonesia's central bank is set to start its monthly policy meeting. A novelty this year is that the monthly policy meetings of Bank Indonesia will take two days instead of one. Another interesting novelty is that Bank Indonesia invited Indonesia's Chief Economics Minister Darmin Nasution to attend the central bank's first policy meeting of 2016. Analyst opinions about whether Bank Indonesia has room to cut its relatively tight monetary policy are mixed.

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  • Bank Indonesia: Foreign Exchange Reserves Rose in December 2015

    Bank Indonesia: Foreign Exchange Reserves Rose in December 2015

    The central bank of Indonesia (Bank Indonesia) announced that the country's foreign exchange reserves have risen considerably in December 2015. At the end of the last month of 2015 the foreign exchange assets stood at USD $105.9 billion, up from USD $100.2 billion in the preceding month. This is a remarkable result as the global and domestic economy is still plagued by uncertainty and volatile capital flows (in December the Federal Reserve finally raised its key Fed Fund Rate by 25 basis points).

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  • Bank Indonesia Survey: Indonesian Consumers More Optimistic

    Bank Indonesia Survey: Indonesian Consumers More Optimistic

    Good news at the start of the new year. Indonesia's consumer confidence has risen in December 2015 according to the latest Bank Indonesia survey. Consumer optimism means that consumers are more likely to purchase goods hence giving ammunition for accelerated economic growth (domestic consumption accounts for about 55 percent of the nation's total economic growth). The portion of income that respondents use for consumption rose 0.6 percent month-on-month (m/m) to 69 percent of their income.

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  • Currency Update: Why is Indonesia's Rupiah Rallying?

    Currency Update: Why is Indonesia's Rupiah Rallying?

    The Indonesian rupiah continued its remarkable rally on Tuesday (22/12). The currency had appreciated 0.98 percent to IDR 13,672 per US dollar by 11:10 am local Jakarta time (Bloomberg Dollar Index). The rupiah has recovered from a recent low of IDR 14,123 on Monday 14 December to IDR 13,672 per US dollar, a 3.2 percentage point advance in about one week. There are several matters that explain this remarkable performance.

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  • Credit Growth Indonesia to Fall Short of Bank Indonesia Target

    Credit Growth Indonesia to Fall Short of Bank Indonesia Target

    Bank Indonesia, the central bank of Indonesia, expects banks' credit growth realization to reach 9-10 percent (y/y) in 2015, below its target of 11-13 percent (y/y). Up to October 2015 Indonesian banks' credit growth stood at 10.4 percent, slowing from 11.1 percent in the preceding month. Juda Agung, Executive Director of Economic and Monetary Policy Department Bank Indonesia, said slowing credit growth is in line with the economic slowdown.

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  • Bank Indonesia Leaves Interest Rate Unchanged at 7.50%

    Bank Indonesia Leaves Interest Rate Unchanged at 7.50%

    Bank Indonesia, the central bank of Southeast Asia's largest economy, kept its key interest rate (BI rate) at 7.50 percent at the December policy meeting on Thursday (17/12). Meanwhile, the overnight deposit rate facility (Fasbi) was left unchanged at 5.50 percent and the lending facility at 8.00 percent. It was the tenth consecutive month without changing the country's interest rate environment (in February 2015 the central bank cut the BI rate by 0.25 percent).

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  • Foreign Exchange Reserves Indonesia Fall Slightly in November

    Foreign Exchange Reserves Indonesia Fall Slightly in November

    The foreign exchange reserves of Indonesia fell slightly in November. According to the latest data from Indonesia's central bank (Bank Indonesia) the reserves stood at USD $100.24 billion at end-November, down from USD $100.7 billion at the end of the preceding month. The reserves fell on foreign exchange receipts, public foreign debt payments and the central bank's efforts to stabilize the rupiah exchange rate.

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  • Asian Development Bank Cuts Forecast for Economic Growth Indonesia

    The Asian Development Bank (ADB) lowered its forecast for economic growth in Indonesia to 4.8 percent year-on-year (y/y) in 2015 and to 5.3 percent (y/y) in 2016 from previously 4.9 percent (y/y) and 5.4 percent (y/y), respectively. In its latest report on Indonesia, the ADB cited that problems related to budget disbursement and the nation’s weak export performance were the main factors to cut its growth projection for Indonesia - for both 2015 and 2016 - by 0.1 percentage point. In September 2015, the ADB had already cut its growth forecast for Indonesia on the back of negative effects of China’s economic slowdown.

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Latest Columns Bank Indonesia

  • Update Indonesia Rupiah: Strengthening against the USD over the Past Month

    Update Indonesia Rupiah: Strengthening against the USD over the Past Month

    Over the past week, the Indonesian rupiah continued to appreciate against the US dollar. Based on the Bloomberg Dollar Index, the rupiah appreciated 0.07 percent to IDR 12,850 per US dollar on Friday (17/04). Only a month ago, investors and policymakers were alarmed when the rupiah touched IDR 13,245 per US dollar, a 17-year low. This column discusses the factors that caused the strengthening of the rupiah in recent weeks. However, amid looming further monetary tightening in the USA, this development should be short-term only.

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  • Bank Indonesia Press Release: BI Rate Maintained at 7.50%

    Bank Indonesia Press Release: BI Rate Maintained at 7.50%

    Indonesia’s central bank (Bank Indonesia) decided to maintain its benchmark interest rate (BI rate) at 7.50 percent, the deposit facility rate at 5.50 percent and lending facility rate at 8.00 percent. This interest rate environment is considered to be in line with the central bank’s ongoing efforts to push the country’s inflation figure within its target of 4±1 percent for 2015 and 2016, as well as to control the country’s current account deficit towards a healthier level at 2.5-3 percent of gross domestic product (GDP) in the medium term.

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  • Interest Rate Environment: Why Bank Indonesia Left it Unchanged?

    Interest Rate Environment: Why Bank Indonesia Left it Unchanged?

    Indonesia’s central bank (Bank Indonesia) decided to hold the country’s key interest rate (BI rate) at 7.50 percent, the deposit facility rate at 5.50 percent, and the lending facility rate at 8.00 percent at the Board of Governor’s Meeting conducted on Tuesday 17 March 2015. Bank Indonesia said that its decision is in line with its ongoing efforts to push inflation back to the target range of 4±1 percent for both 2015 and 2016, and to guide the country’s current account deficit towards a healthier level at 2.5-3 percent of GDP in the medium term.

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  • Economy of Indonesia: Inflation, Trade, Interest Rates & Rupiah Update

    Indonesia’s consumer price index fell for the second consecutive month in February 2015, recording deflation of 0.36 percent month-on-month (m/m) in February, while on an annual basis Indonesian inflation eased to 6.29 percent (y/y), down from 6.96 percent (y/y) in the preceding month. Inflationary pressures declined primarily on the back of lower prices of chili peppers and fuel. Easing inflation in Southeast Asia’s largest economy may provide room for Indonesia’s central bank (Bank Indonesia) to cut interest rates further this year.

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  • Analysis Performance of the Indonesian Rupiah Exchange Rate

    The Indonesian rupiah exchange rate continued to depreciate on Monday (02/03). According to the Bloomberg Dollar Index, Indonesia’s currency depreciated 0.30 percent to IDR 12,970 per US dollar, a six-year low. Apart from general bullish US dollar momentum in recent months (amid monetary tightening in the USA), the rupiah weakened due to Bank Indonesia’s signals that it tolerates a weaker currency in a move to boost exports (limiting the country’s current account deficit), and due to China’s interest rates cut.

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  • Bank Indonesia Lowers Key Interest Rate in Surprise Move

    In a surprise move, the central bank of Indonesia (Bank Indonesia) decided to lower its key interest rate (BI rate) by 25 basis points to 7.50 percent at the Board of Governor’s Meeting on Tuesday (17/02). The deposit facility rate (Fasbi) was also lowered by 25 basis points (to 5.50 percent), while the lending facility rate remained steady at 8.00 percent. In a press release the central bank stated that the current policy direction is estimated to moderate the country’s wide current account deficit further, while inflation remains under control.

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  • Trade Balance of Indonesia Improved in 2014

    The trade balance of Indonesia improved in 2014. Over the whole year of 2014 Indonesia posted a USD $1.88 billion trade deficit, significantly better than the USD $4.08 billion deficit it recorded a year earlier. Today (02/02), Statistics Indonesia announced that Indonesia posted a USD $0.19 billion trade surplus in the last month of the year after having recorded a USD $0.42 billion trade deficit in the preceding month. The improved performance is mainly due to the country’s growing non-oil & gas surplus and narrowing oil & gas deficit.

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  • Growth Indonesia’s Foreign Debt Accelerated in November 2014

    Foreign debt of Indonesia accelerated 11.8 percent year-on-year (y/y) to USD $294.4 billion in November 2014. This total debt of USD $294.4 billion in November 2014 consists of public foreign debt of USD $133.9 billion and private foreign debt of USD $160.5 billion. The central bank of Indonesia (Bank Indonesia) stated that public foreign debt rose 8.6 percent (y/y) mainly on a rise in foreign holdings on government debt securities. Meanwhile, the growth pace of private foreign debt slightly eased.

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  • Indonesia Investment Summit 2015: Structural Reforms Needed

    At the Indonesia Investment Summit 2015, organized in Jakarta on 15-16 January 2015, Bank Indonesia official Arief Mahmud presented several views of the central bank on the current Indonesian economy and the global and domestic challenges that it faces. As is widely known, Indonesia has been experiencing a process of slowing economic growth since 2011 due to sluggish global economic growth in combination with the rebalancing of the domestic economy. However, growth is expected to accelerate in 2015.

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  • Rupiah Update Indonesia: Stronger on US Jobs Data

    Rupiah Update Indonesia: Stronger on US Jobs Data

    In line with the performance of other Asian emerging currencies, Indonesia's rupiah exchange rate appreciated on Monday (12/01) as the fall in US wages (released late last week) caused speculation that the Federal Reserve will - for now - delay its plan to start raising US borrowing costs. Despite solid growing US non-farm payrolls in December 2014, US wages (average hourly earnings) fell the most in eight years. Indonesia’s rupiah appreciated 0.38 percent to IDR 12,599 per US dollar according to the Bloomberg Dollar Index.

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