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Today's Headlines Bank Indonesia

  • Consumer Confidence in Indonesia Turns Positive in November

    Consumer Confidence in Indonesia Turns Positive in November

    The latest consumer survey of Indonesia's central bank (Bank Indonesia) indicates that consumer confidence in Indonesia has improved - turning pessimism into optimism - in November on expectations of better economic conditions. Bank Indonesia's consumer confidence index, which is based on 1,700 household respondents in six major cities in Indonesia, rose to 103.7 points in November from 99.3 points in the preceding month. A reading below 100.0 signals that consumers are pessimistic.

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  • Inflation Update Indonesia: Falling Below Central Bank's 2015 Target

    Inflation Update Indonesia: Falling Below Central Bank's 2015 Target

    The central bank of Indonesia (Bank Indonesia) expects headline inflation to reach 2.79 percent (y/y) in full-year 2015, below the central bank's target range of between 3 and 5 percent. Inflation has been low in Indonesia this year, accumulating to 2.16 percent in the first ten months of 2015, and Bank Indonesia estimates that the pace of inflation will remain controlled in the last two months of 2015.

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  • Indonesia's Foreign Debt Growth Slowed on Global Uncertainty

    Indonesia's Foreign Debt Growth Slowed on Global Uncertainty

    Total outstanding foreign debt of Indonesia fell to USD $302.4 billion at the end of the third quarter of 2015, down USD $2.1 billion from the end of the preceding quarter. The central bank of Indonesia (Bank Indonesia) said both public and private external debt declined in Q3-2015 as both sectors were reluctant to take up new (overseas) debt amid global uncertainties, Indonesia's sluggish economic growth, and the fragile rupiah (ahead of looming capital outflows brought about by higher US interest rates).

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  • Stock Market & Rupiah Update Indonesia: Back in the Red

    Stock Market & Rupiah Update Indonesia: Back in the Red

    Stock indices in Asia were mixed on Wednesday (18/11), while most emerging market currencies depreciated against the US dollar. The Indonesian rupiah was under pressure - touching a six week low - after the central bank (Bank Indonesia) cut the primary minimum statutory reserves from 8.00 percent to 7.50 percent (effective per 1 December 2015), hence providing local financial institutions approximately USD $1.8 billion more in liquidity. However, it may not be enough to trigger an increase in lending as banks are more focused on lending quality than quantity.

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  • Bank Indonesia Expects GDP Growth at Lower End of Target Range in 2015

    Bank Indonesia Expects GDP Growth at Lower End of Target Range in 2015

    The central bank of Indonesia (Bank Indonesia) expects the country's economic growth to come in the lower end of its 4.7-5.1 percent (y/y) gross domestic product (GDP) growth target range for full-year 2015. Bank Indonesia Governor Agus Martowardojo expects to see accelerated economic growth in the last quarter of the year (from the preceding quarter) due to increased government spending and investment. In the second quarter of 2015, Indonesia's economy expanded at the slowest pace in six years (+4.67 percent y/y), then accelerating to 4.73 percent (y/y) in the following quarter.

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  • Bank Indonesia Keeps Key Interest Rate at 7.50% in November Policy Meeting

    Bank Indonesia Keeps Key Interest Rate at 7.50% in November Policy Meeting

    Bank Indonesia Governor Agus Martowardojo announced during a press conference that the central bank kept its benchmark interest rate (BI rate) at 7.50 percent during the Board of Governor's Meeting on 17 November 2015. Meanwhile, Bank Indonesia maintained the deposit facility rate and the lending facility rate at 5.50 percent and 8.00 percent, respectively. The current interest rate environment is considered sufficient to face persistent global uncertainties caused by the looming Fed Fund Rate hike and sluggish economic growth in the Eurozone and China.

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  • Bank Indonesia: Current Account Deficit Improved to 1.86% of GDP in Q3-2015

    Bank Indonesia: Current Account Deficit Improved to 1.86% of GDP in Q3-2015

    The current account balance of Indonesia improved due to the stronger non-oil & gas trade balance. Indonesia's current account deficit eased to USD $4.0 billion, or 1.86 percent of the country's gross domestic product (GDP), in the third quarter of 2015. This performance was much better than the USD $7.0 billion deficit (3.02 percent of GDP) recorded in Q3-2014 or USD $4.2 billion (1.95 percent of GDP) in Q2-2015. Meanwhile, the balance of payments showed a deficit of USD $4.6 billion, up from the deficit of USD $2.93 billion in the preceding quarter.

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  • Foreign Exchange Reserves Indonesia Continued to Drop in October

    Foreign Exchange Reserves Indonesia Continued to Drop in October

    The central bank of Indonesia announced on Friday (06/11) that Indonesia's foreign exchange reserves have fallen by USD $1 billion to USD $100.7 billion at the end of October 2015. The decline was caused by foreign debt payments and efforts to stabilize the fragile rupiah (Indonesia's currency is sensitive to market expectations regarding looming higher US interest rates).

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  • Bank Indonesia Cuts 2015 Inflation Projection to 3.6%

    Bank Indonesia Cuts 2015 Inflation Projection to 3.6%

    The central bank of Indonesia (Bank Indonesia) expects to see a sharp slowdown in inflation in the last couple of months of 2015. Currently, the annual inflation pace stands at 6.83 percent (y/y). However, by the year-end Bank Indonesia estimates the consumer price index to have eased to 3.6 percent (y/y), which would be in the lower range of its 2015 inflation target (3-5 percent y/y). This update was given by Bank Indonesia Governor Agus Martowardojo when meeting the Financial Sector Stability Coordination Forum (FKSSK).

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  • Bank Indonesia: Still 320 Companies to Comply with Hedging Rules

    Bank Indonesia: Still 320 Companies to Comply with Hedging Rules

    Agus Martowardojo, Governor of the central bank of Indonesia (Bank Indonesia), said there are still 320 local companies that have not complied with the central banks' hedging requirements regarding foreign loans. A Bank Indonesia study conducted in late-2014 showed that the country’s private sector foreign debt is vulnerable to several risks i.e. currency risks, liquidity risks and overleverage risks due to unhedged loans.

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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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