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Today's Headlines Bank Indonesia

  • Bank Indonesia Concerned about Local Companies' Unhedged Foreign Debt

    Although Indonesia’s debt-to-GDP ratio is currently still at a safe level at roughly 32.8 percent, the country’s central bank (Bank Indonesia) expressed its concern about the high debt service ratio (DSR) and debt-to-export ratio. The DSR is the ratio of debt service payments (principal and interest) of a country to its export earnings. Generally, a healthy ratio is somewhere in the range of 0 and 20 percent. However, Indonesia’s DSR has risen from 20 percent in 2007 to 50 percent in 2014.

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  • Bank Indonesia Keeps Key Interest Rate (BI Rate) at 7.50% in July 2014

    The central bank of Indonesia (Bank Indonesia) decided to keep its benchmark interest rate (BI rate) at 7.50 percent at today’s Board of Governor’s meeting. The lending facility as well as deposit facility were maintained at 7.50 and 5.75 percent, respectively. The central bank believes that the current interest rate environment is able to push the inflation figure back to its target range of between 3.5 and 5.5 percent by the year-end. Earlier this month, Statistics Indonesia announced that inflation has eased to 6.70 percent (year-on-year) in June 2014.

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  • Foreign Exchange Reserves at Bank Indonesia Rise Slightly in June 2014

    The central bank of Indonesia (Bank Indonesia, BI) released a statement on Monday (07/07) which shows that the country’s foreign exchange reserves have expanded 0.7 percent to USD $107.7 billion in June 2014 mainly on an increase of the government’s oil & gas revenue (that exceeds the foreign debt payment) and higher foreign-exchange term deposits at local banks, reducing the need for Bank Indonesia to intervene in the foreign exchange market. However, the central bank did not provide any figures on these revenues and deposits.

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  • A Forecast on Indonesia’s May Trade Balance and June Inflation

    Indonesian Finance Minister Chatib Basri estimates that the trade balance of Indonesia may post an USD $500 million surplus in May 2014 amid improved performance of the country’s crude palm oil (CPO) exports, both in terms of price and volume (crude palm oil being one of the most important foreign exchange earners of Indonesia). Concern about Indonesia’s trade balance (and current account balance) had returned after Indonesia recorded an USD $1.96 billion deficit in the previous month.

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  • Bank Indonesia and World Bank: How to Escape the Middle Income Trap?

    The Governor of Indonesia’s central bank (Bank Indonesia), Agus Martowardojo, said that the Indonesian economy can grow more than six percent provided that several important structural reforms will be implemented in order to avoid the middle income trap. This trap occurs when rapidly growing economies stagnate at middle-income levels for many years, thereby failing to reach a high income level (as has been the case with Brazil, Mexico, South Africa and other middle income countries from the early 1980s to the mid-2000s).

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  • Indonesia Financial Update: May 2014 Trade Balance and June 2014 Inflation

    The central bank of Indonesia (Bank Indonesia) expects to see a trade surplus in May 2014. Governor of Bank Indonesia Agus Martowardojo stated that he is optimistic that Indonesia’s trade balance will show positive growth after recording a shocking deficit of USD $1.96 billion in April 2014. This deficit was mainly the result of weak global demand for crude palm oil and coal, both of which are Indonesia’s most important foreign exchange earners in the non-oil & gas sector. However, this global demand is expected to have remained weak in May.

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  • Foreign Exchange Reserves of Indonesia Rise to $107B in May 2014

    The central bank of Indonesia (Bank Indonesia) announced that its foreign exchanges reserves had risen to USD $107.0 billion by the end of May 2014, up from USD $105.6 billion at the end of the previous month. This increase primarily stemmed from government oil and gas export earnings as well as an influx of foreign portfolio capital into Southeast Asia's largest economy, which reflects the positive perception of international investors with regard to the economic fundamentals of Indonesia.

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  • Bank Indonesia: Consumer Confidence in Indonesia Increases in May 2014

    According to Bank Indonesia's consumer confidence survey, Indonesian consumers were more optimistic in May 2014 compared to the previous month. Consumer confidence in Southeast Asia's largest economy increased to 116.90 in May 2014 from 113.90 in April. The increase indicates that Indonesian consumers are more optimistic about the current condition of the Indonesian economy as well as conditions in the coming six months. The result in May 2014 was also higher than in the same month in 2013 (112.8).

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  • Financial Update Indonesia: Rupiah, Current Account and Bonds Issuance

    Indonesia's central bank (Bank Indonesia) said that it expects the Indonesian rupiah exchange rate to trade between IDR 11,600 and IDR 11,800 per US dollar throughout the fiscal year of 2014. Governor of Bank Indonesia Agus Martowardojo said that this assumption is based on pressures that originate from Indonesia's current account deficit. In 2013, the current account deficit hit USD $29.09 billion, or 3.33 percent of the country's gross domestic product (GDP). The current account balance has a major influence on the performance of a currency.

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  • Bank Indonesia Expects Trade Deficit in April and Low Inflation in May

    The central bank of Indonesia (Bank Indonesia) expects to see a trade deficit in the month of April 2014 due to a significant increase of imports (around 11 percent month-to-month), while prices of a number of important export commodities have been under pressure (including coal and crude palm oil). Governor of Bank Indonesia Agus Martowardojo said that weak demand from China impacts negatively on the trade balance. Bank Indonesia's statement contradicts the institution's earlier statement which hinted at a surplus of USD $600 million in April.

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Latest Columns Bank Indonesia

  • Views & Background of Bank Indonesia's New Governor Perry Warjiyo

    Chances are big that Perry Warjiyo will become the next governor of Indonesia's central bank (Bank Indonesia). On Wednesday (28/03) Warjiyo, the sole nominee of Indonesian President Joko Widodo to replace incumbent Bank Indonesia Governor Agus Martowardojo after the latter's term ends in May 2018, appeared before the House of Representatives' (DPR) financial commission for a "fit and proper" test.

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  • Bank Indonesia Holds Rates; Sees Stable Economy & Recovery

    The central bank of Indonesia (Bank Indonesia) kept its benchmark interest rate - the BI 7-day Reverse Repo Rate - at 4.25 percent at the February Board of Governor's Meeting (14-15 February 2018). Meanwhile, it maintained the deposit facility and lending facility rates at 3.50 percent and 5.00 percent, respectively (effective per 19 February 2018).

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  • Bank Indonesia Studies the Use of Central Bank Digital Currency

    The central bank of Indonesia (Bank Indonesia) said it needs about two years to complete a study about the possibility of issuing a digital rupiah currency (Central Bank Digital Currency, or CBDC). Agus Martowardoyo, Governor of Bank Indonesia, said the lender of last resort has just started to study the possibility of using a digital rupiah for domestic payments.

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  • Bank Indonesia Keeps Rates Unchanged But Boosts Banks' Liquidity

    The central bank of Indonesia, Bank Indonesia, left its interest rate regime unchanged - for the fourth straight month - at the January 2018 policy meeting. The benchmark BI 7-day Reverse Repo Rate was kept at 4.25 percent, while the deposit facility and lending facility rates were held at 3.50 percent and 5.00 percent, respectively (effective per 19 January 2018). These decisions were in line with analyst forecasts.

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  • Finance Update Indonesia: Rupiah & Foreign Exchange Reserves

    Although the Indonesian rupiah has been strengthening against the US dollar since mid-December 2017, the rupiah may encounter serious pressures in the year 2018 amid US tax reforms, the US Federal Reserve's further monetary tightening, and unstable geopolitics. Meanwhile, Indonesian exports are expected to grow, but only in the range of 5-6 percent year-on-year (unlike 2017 when the nation's exports rebounded 17 percent).

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  • Analysis: Bank Indonesia Holds Policy Rate at 4.25% in December

    At the monthly policy meeting on 13-14 December 2017, Bank Indonesia decided to hold the benchmark BI 7-day Reverse Repo Rate at 4.25 percent, while it maintained the deposit facility and lending facility rates at 3.50 percent and 5.00 percent, respectively, effective per 15 December 2017.

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  • Analysis: Bank Indonesia Holds Key Rate at 4.25% in November

    In line with expectations, the central bank of Indonesia (Bank Indonesia) left its benchmark interest rate unchanged on Thursday (16/11). The seven-day reverse repurchase rate (BI 7-day Reverse Repo Rate) was kept at 4.25 percent for a second straight month. Meanwhile, the deposit facility and lending facility rates were kept at 3.50 percent and 5.00 percent respectively.

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  • Bank Indonesia to Revise 2017 Economic Growth Target Soon

    The central bank of Indonesia (Bank Indonesia) said it will revise its outlook for Indonesia's economic growth in full-year 2017 after the Q3-2017 GDP growth figure - released at the start of the week - was well below expectations. Previously, Bank Indonesia set its economic growth target for Indonesia in 2017 in the range of 5.0 - 5.4 percent year-on-year (y/y).

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  • Bank Indonesia Sees Improving Global & Domestic Economy

    The Bank Indonesia (BI) Board of Governors agreed to hold the BI 7-day Reverse Repo Rate at 4.25 percent, while maintaining the deposit facility and lending facility rates at 3.50 percent and 5.00 percent, respectively, effective per 20 October 2017. The decision was in line with efforts to maintain macroeconomic and financial system stability, while stimulating the domestic economic recovery.

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  • Monetary Policy Indonesia: Central Bank Cut Key Interest Rate Again

    The central bank of Indonesia (Bank Indonesia) made another surprise move by cutting its benchmark BI 7-day Reverse Repo Rate 25 basis points (bps) from 4.50 percent to 4.25 percent at the September 2017 policy meeting. Meanwhile, Bank Indonesia also lowered the deposit and lending facility rates by 25 bps to 3.50 percent and 5.00 percent, respectively, effective per 25th September.

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