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Latest Reports Bank Indonesia

  • Inflation Update Indonesia: Higher Fuel Prices Cause Inflationary Pressure

    The central bank of Indonesia (Bank Indonesia) estimates that Indonesia’s inflation rate in March will be around 0.3 to 0.4 percent month-to-month (m/m), slightly higher than its earlier forecast of around 0.28 percent (m/m). Later this week, Statistics Indonesia will release the country’s March inflation figure. In February inflation eased to 6.29 percent year-on-year (y/y) - from 6.96 percent (y/y) in the preceding month - amid declining fuel and food prices despite some inflationary pressures caused by higher rice prices.

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  • Indonesian Currency Update: Stronger Rupiah, Weaker US Dollar

    Indonesia’s rupiah exchange rate started the week on a firm tone as the US dollar weakened amid uncertainty over the timing of higher US interest rates. Contrary to initial expectation, the latest Federal Reserve meeting (held on 17-18 March) did not indicate that there will be a quick interest rate hike in the world’s largest economy hence boosting appetite for emerging market assets. In addition, the Indonesian government and central bank (Bank Indonesia) pledged to safeguard rupiah stability.

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  • Central Bank of Indonesia Keeps Key Interest Rate at 7.50% in March

    The central bank of Indonesia (Bank Indonesia) decided to maintain its benchmark interest rate at 7.50 percent at today’s Board of Governors’ Meeting. The overnight deposit facility rate and lending facility rate were maintained at 5.50 percent and 8.00 percent, respectively. Bank Indonesia considers that the current interest rate environment is in line with its target to push inflation within its target range of 3.0-5.0 percent (y/y) in 2015 and to curb the country’s current account deficit to a range of 2.5-3.0 percent of gross domestic product (GDP).

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  • Indonesian Gvt to Implement Measures to Combat Current Account Deficit

    After a series of good economic data (particularly US employment) the market expects that the Federal Reserve will raise its key interest rate in the second or third quarter of 2015 thus providing ammunition for bullish US dollar momentum (hovering at an 11-years high). Due to the expected higher yield in the USA, capital is flowing back to the world’s largest economy at the expense of emerging market currencies, including the Indonesian rupiah exchange rate which has depreciated 6 percent against the US dollar this year so far.

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  • Trade Balance Indonesia Update: BI Expects $500 Million February Surplus

    The central bank of Indonesia (Bank Indonesia) expects that the country’s trade balance will show a USD $500 million surplus in February 2015 on the back of increased manufacturing exports, the higher price of crude palm oil, and lower oil imports. In January, Indonesia’s trade balance recorded a USD $710 million surplus, divided into a USD $748 million surplus in the non-oil & gas trade balance and a USD $38.6 million deficit in the oil & gas trade balance.

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  • Indonesia Update: Retail Sales, Cement Sales & Motorcycle Sales

    According to the latest survey of Bank Indonesia (the central bank of Indonesia), the country’s January retail sales accelerated 10.4 percent year-on-year (y/y), up from the 3.3 percentage point growth pace (y/y) in the preceding month. Retail sales in the first month of the year in Southeast Asia’s largest economy accelerated because of higher sales of information & communication equipment (+29.9 percent y/y) as well as food, beverages & tobacco products (+15.1 percent y/y).

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  • Indonesia’s Foreign Exchange Reserves Rose in February 2015

    The central bank of Indonesia (Bank Indonesia) announced on Friday (06/03) that the country’s official foreign exchange reserves stood at USD $115.5 billion at end-February 2015, up from USD $114.2 billion in the preceding month. The growth was primarily the consequence of improved oil & gas export revenues, and which exceed payments of the government’s external debts. The news caused positive sentiments on Indonesia’s markets and contributed to the record high closing of Jakarta Composite Index on Friday.

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  • Markets Feel Impact of Bank Indonesia’s Interest Rate Cut

    One day after the surprise interest rate cut by Indonesia’s central bank, Indonesian stocks surge to a new record level led by interest rate sensitive stocks (such as financial institutions, construction firms and property firms) while the rupiah and government bonds are weakening. Yesterday (17/02), Bank Indonesia shocked markets by lowering its key interest rate (BI rate) and deposit facility rate (Fasbi) by 25 basis points, each, to 7.50 percent and 5.50 percent, respectively. Easing monetary policy is back in fashion among the region’s central banks.

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  • Current Account & Balance of Payments of Indonesia Improved in 2014

    The central bank of Indonesia (Bank Indonesia) announced on Friday (13/02) that Indonesia’s current account deficit - the broadest measure of trade in goods and services - improved to 2.81 percent of gross domestic product (GDP), or USD $6.2 billion, in the fourth quarter of 2014 (from a revised 2.99 percent of GDP in the preceding quarter). The full-year 2014 deficit amounted to USD $26.2 billion, equivalent to 2.95 percent of GDP from a (revised) deficit of USD $29.1 billion (3.18 percent of GDP) in 2013.

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  • IMF & Moody’s Outlook on the Indonesian and World Economy

    Benedict Bingham, Senior Resident Representative for Indonesia at the International Monetary Fund (IMF), expects that the central bank of Indonesia (Bank Indonesia) will remain committed to the tighter monetary policy in a bid to safeguard the country’s fiscal fundamentals amid external pressures. Apart from sluggish global economic growth, the looming interest rate hike in the USA (later this year) is expected to rock Indonesia as it will trigger capital outflows from emerging markets.

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