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Today's Headlines Bank Indonesia

  • Consumer Confidence in Indonesia Rises on Lower Fuel Prices

    The latest Consumer Confidence Survey released by Indonesia’s central bank indicated that Indonesian consumers were more optimistic in January 2015 (compared to the previous month) on the back of recent fuel price cuts. The index, based on a total of 4,600 households across 18 major Indonesian cities, climbed to 120.2 points in January, up from 116.5 in the preceding month (a score above 100 signals consumer optimism). In December the index had declined due to higher administered fuel prices.

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  • Inflation Outlook Indonesia January 2015: Impact of Fuel Policy

    Inflation in Indonesia is expected to have eased to 7.50 percent year-on-year (y/y) in January 2015 on the back of cheaper domestic fuel prices (triggered by sliding global oil prices). The month-on-month pace (m/m) in the first month of 2015 may have tumbled to near zero percent from 2.46 percent (m/m) in December 2014. Last year, Indonesian inflation had accelerated to 8.36 percent (y/y) primarily due to the implementation of higher prices for government administered low-octane gasoline and diesel in November 2014.

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  • Indonesian Authorities Revise Economic Assumptions in 2015 Budget

    The Indonesian government, central bank (Bank Indonesia) and Commission XI of the House of Representatives (DPR) agreed to revise several macroeconomic targets in the Revised 2015 State Budget (APBN-P 2015). The revisions include the country’s economic growth (GDP) pace, the average rupiah exchange rate, and inflation target. In essence, the revisions indicate that Indonesian authorities have become less optimistic about the Indonesian economy in 2015 amid external pressures.

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  • Positive Structural Change in Indonesia’s Current Account Deficit?

    The current account deficit of Indonesia, which is expected to have improved slightly from 3.3 percent of the country’s gross domestic product (GDP) in 2013 to about 3 percent of GDP in 2014, is forecast to continue to improve in 2015 hence placing less pressures on the rupiah exchange rate and the economy in general. A wide current account deficit makes the country vulnerable to capital outflows in times of global shocks (for example looming higher US interest rates) as the deficit signals that Indonesia relies on foreign funding.

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  • Key Interest Rate: Bank Indonesia Maintains BI Rate at 7.75%

    The central bank of Indonesia (Bank Indonesia) decided to keep its benchmark interest rate (BI rate) at 7.75 percent at its Board of Governors’ Meeting on Thursday (15/01). The country’s Lending Facility and Deposit Facility were maintained at 8.00 percent and 5.75 percent, respectively. According to the bank this interest rate environment is sufficient to push inflation, which has accelerated to 8.36 percent year-on-year (y/y) in December due to fuel subsidy reforms, back towards its target of 3 to 5 percent (y/y) in 2015.

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  • Indonesia’s Foreign Exchange Reserves Climbed at End 2014

    Despite having intervened to support the rupiah exchange rate, Indonesia’s central bank announced that the country’s foreign exchange reserves rose USD $800 million to USD $111.9 billion at the end of December 2014. The rise was primarily due to foreign exchange income from Indonesia’s oil and gas exports as well as the withdrawal of government’s foreign debt. Tirta Segara, Executive Director of Bank Indonesia, said that foreign exchange savings and banks swaps with Bank Indonesia had also increased at the end of 2014.

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  • After Fed Meeting Indonesia’s Rupiah Appreciates Markedly

    Although many currencies weakened against the US dollar after the US Federal Reserve stated that it is on track to raise its key Fed Fund Rate "somewhere next year" amid structural improvement of the US economy (after having kept the rate near zero for a "considerable time"), Indonesia's rupiah opened strong on Thursday (18/12). Based on the Bloomberg Dollar Index, Indonesia’s currency had appreciated 0.91 percent to IDR 12,553 per US dollar at 9:15 local Jakarta time.

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  • Bank Indonesia’s BI Rate Unchanged after December Board Meeting

    Indonesia’s central bank decided to keep its benchmark interest rate (BI rate) at 7.75 percent at Thursday’s Board of Governors’ Meeting (11/12). The Lending Facility and Deposit Facility were kept at 8.00 percent and 5.75 percent, respectively. The central bank is convinced that the current interest rate levels are effective to combat short-term inflationary pressures (triggered by the implementation of higher subsidized fuel prices in mid-November) pushing it back to the target corridor of between 3 and 4 percent (y/y) in 2015.

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  • Financial Update Indonesia: Credit Growth, Bad Loans and Retail Sales

    The central bank of Indonesia projects non-performing loans (NPL) to rise to 2.4 percent of the country’s total outstanding loans by the end of the year, significantly up from 1.8 percent at the end of last year. Despite the acceleration of bad loans in Indonesia, the institution stated that it is still manageable. Meanwhile, loan growth in Indonesia is estimated to slow to 11 or 12 percent (y/y) by the end of 2014 (the slowest pace since 2010), down from 21.4 percent (y/y) in 2013 primarily due to the central bank’s monetary tightening policy.

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  • Financial Update Indonesia: Rupiah vs Dollar & Forex Reserves

    The central bank of Indonesia announced that the country’s foreign exchange reserves declined USD $900 million to USD $111.1 billion at the end of November 2014. The decline was primarily due to government debt repayments and the central bank’s use of foreign exchange to engage in monetary management. Meanwhile, the Indonesian rupiah exchange rate - which had touched six year lows in recent days - appreciated 0.08 percent to IDR 12,299 per US dollar on Friday (05/12) based on the Bloomberg Dollar Index.

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Latest Columns Bank Indonesia

  • Monetary Policy Indonesia: the Need for Hawkish Statements Reduces

    In line with expectations, the central bank of Indonesia (Bank Indonesia) kept its benchmark BI 7-Day Reverse Repo Rate at 6.00 percent at the February policy meeting that was held on 20-21 February 2019. Also the deposit facility and lending facility rates were kept at 5.25 percent and 6.75 percent, respectively.

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  • Monetary Policy: Bank Indonesia Leaves Interest Rates Unchanged in December

    In line with expectations, the central bank of Indonesia (Bank Indonesia) left its interest rates unchanged at the last monetary policy meeting of 2018 (held on 19-20 December 2018). The benchmark BI 7-Day Reverse Repo Rate was held at 6.00 percent, while the deposit facility and lending facility rates were kept at 5.25 percent and 6.75 percent, respectively.

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  • Indonesia Sees Widening Current Account Deficit in Q2-2018

    Concerns about Indonesia's current account balance increased after Bank Indonesia announced last week that the country's current account deficit widened to USD $8.02 billion, or 3.0 percent of gross domestic product (GDP), in the second quarter of 2018. It is Indonesia's highest quarterly deficit since Q3-2014, thus putting additional pressures on the rupiah exchange rate.

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  • Bank Indonesia Kept 7-Day Reverse Repo Rate at 5.25%; Analysis

    Bank Indonesia decided to hold the BI 7-day Reverse Repo Rate at 5.25 percent during the July 2018 monthly policy meeting. It also maintained the deposit facility and lending facility rates at 4.50 percent and 6.00 percent, respectively. Bank Indonesia believes the rates are consistent with its efforts to maintain domestic financial market attractiveness against a backdrop of pervasive uncertainty on global financial markets.

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  • Analysis: Bank Indonesia Opts for Monetary Tightening to Offset Pressures

    For the first time in four years Bank Indonesia opted for monetary tightening by raising the benchmark interest rate (the 7-Day Reverse Repo Rate) by 25 basis points (bps) to 4.50 percent. Also the deposit facility and lending facility rates were raised by 25 bps to 3.75 percent and 5.25 percent, respectively (effective per 18 May 2018). This latest move is part of Bank Indonesia's efforts to maintain economic stability amid the high degree of uncertainty in global financial markets.

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  • Bank Indonesia Conducts Ad Hoc Press Conference on Rupiah Movement

    In an ad hoc press conference on Thursday (26/04) Bank Indonesia Governor Agus Martowardojo provided an update on the performance of the Indonesian rupiah as well as an update on the strategies that are - or can be - used by the central bank to safeguard a stable rupiah. When the ad hoc press conference was announced we initially expected to see an interest rate hike. However, based on a statement from Bank Indonesia, this seems to be the last option the central bank wants to use.

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  • Indonesian Stocks Down, Bank Indonesia Active to Defend Rupiah

    Indonesia's benchmark Jakarta Composite Index fell 1.24 percent to 6,229.63 points on Tuesday (24/04). The performance of Indonesian stocks were in line with the general trend in Southeast Asia. Due to rising US treasury yields (touching nearly 3 percent, its highest level since January 2014) investors withdraw their funds from riskier assets in emerging markets. Concerns over US inflation and the fiscal deficit are behind the rising US treasury yield.

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  • Bank Indonesia Leaves Interest Rates Unchanged in April 2018

    Bank Indonesia, the central bank of Indonesia, decided to leave interest rates unchanged at the April policy meeting (18-19 April 2018). The benchmark interest rate (the 7-day Reverse Repo Rate) was kept at 4.25 percent for the seventh straight month. Meanwhile, the deposit facility and lending facility rates were maintained at 3.50 percent and 5.00 percent, respectively. Dody Budi Waluyo, who was inaugurated as Deputy Governor on Wednesday (18/04), said an interest rate hike would be counterproductive to the nation's economic growth.

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