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Today's Headlines Bank Indonesia

  • Bank Indonesia Releases the '2013 Economic Report on Indonesia'

    Bank Indonesia Releases the '2013 Economic Report on Indonesia'

    The central bank of Indonesia (Bank Indonesia) released its '2013 Economic Report on Indonesia' earlier this week. This report discusses in great detail both global and domestic economic dynamics as well as policy responses. The year 2013 was a year full of challenges for the Indonesian economy because of changes in global economic conditions (US Federal Reserve tapering), requiring a range of structural policy changes to steer the economy of Indonesia towards a more balanced growth and restored macroeconomic stability.

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  • External Debt of Indonesia Grew 7.4 Percent in February 2014

    Indonesia’s external debt in February 2014 amounted to USD $272.1 billion, thus having increased 7.4 percent (year-on-year) from the same month a year earlier. Outstanding external debt as of end-February 2014 consisted of public sector debt (USD $129.0 billion) and private sector debt (USD $143.1 billion). The growth pace of Indonesia's external debt in February 2014 was slightly higher than the 7.2 percent (yoy) growth pace recorded in January 2014. These data were taken from Bank Indonesia's website.

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  • Private Sector Foreign Debt in Indonesia Doubled between 2009 and 2013

    Indonesia's central bank (Bank Indonesia) said that the country's private debt has increased steadily in recent years. On the one hand this is a good sign as it indicates that the private sector is growing, but on the other hand the lender of last resort warned Indonesian companies to watch over their foreign loans as it can jeopardize the country’s financial stability. Private sector foreign debt doubled between 2009 and 2013, reaching USD $141.4 billion in January 2014. Meanwhile, public debt stood at the level of USD $127.9 billion in the same month.

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  • Foreign Exchange Reserves of Indonesia Slightly Lower in March 2014

    Indonesia’s official foreign exchange reserve assets stood at USD $102.6 billion as of the end of March 2014, a slight decline from the level of USD $102.7 billion in the previous month. The decline was mainly due to government payments in the context of its maturing global bond in March 2014. At this level, reserve assets can adequately cover 5.9 months of imports or 5.7 months of imports as  well as servicing of government external debt repayment, well above the international standards of reserves adequacy at three months of imports.

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  • Bank Indonesia: Consumer Confidence in Indonesia Remains Strong

    Indonesian consumer confidence continued to grow in March 2014. According to the latest survey of Indonesia's central bank (Bank Indonesia), the country's consumer confidence rose to 118.2 in March from 116.2 one month earlier. Indonesians are particularly optimistic about domestic economic conditions over the next six months, evidenced by a 3.2 point rise in the Consumer Expectations Index to 123.9 points. Increasing consumer confidence is positive for household consumption, an important pillar of Indonesia's economic growth.

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  • DBS Bank: Indonesia's Household Consumption Accelerates on Election

    DBS Bank: Indonesia's Household Consumption Accelerates due to Election

    Singapore-based DBS Bank predicts that household consumption in Indonesia will grow 5.6 percent (yoy) in the first semester of 2014, which is slightly higher than the growth recorded in the last three years. Gundy Cahyadi, economist at the DBS Bank, said that the main reason for this accelerated household consumption is the legislative election that will be held on 9 April 2014. Traditionally, consumption peaks in times of elections. Household consumption is one of the main pillars of Indonesia's economic growth, accounting for 55 percent of GDP.

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  • Bank Indonesia Optimistic on Posting Trade Surplus in February 2014

    Bank Indonesia Optimistic about Recording Trade Surplus in February 2014

    Agus Martowardojo, Governor of the central bank of Indonesia (Bank Indonesia) expects a trade surplus of around USD $700 million in February 2014. If Martowardojo's forecast is realized, it would be a sharp contrast to the USD $430.6 million trade deficit that was recorded one month earlier. In January, the trade deficit was mainly due to declining exports of coal and vegetable oil (which together account for 26.7 percent of total non-oil & gas exports), among others, due to ongoing annual contractual negotiations at the year-start.

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  • Government of Indonesia Optimistic that GDP Growth Target Can Be Met

    Contrary to the World Bank and Bank Indonesia that both revised down forecasts for economic growth of Indonesia in 2014, the government of Indonesia is still convinced that it can meet the target of 5.8 to 6.0 percent as has been set in the 2014 State Budget (APBN 2014). In its most recent Indonesia Economic Quarterly report, the World Bank said it expects Indonesia’s economic growth to reach 5.3 percent in 2014, while Bank Indonesia targets a 5.7 percentage growth rate.

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  • Bank Indonesia Lowers Forecast for Economic Growth in 2014 to about 5.7%

    The central bank of Indonesia (Bank Indonesia) lowered its forecast for growth of Southeast Asia's largest economy in 2014 from the range of 5.8 - 6.2 percent to 5.5 - 5.9 percent as expansion of domestic consumption and exports are less robust than previously estimated. As such, Bank Indonesia implied that economic expansion of Indonesia will slow down further. Starting from 2011, gross domestic product (GDP) growth of Indonesia has declined steadily from 6.5 percent to 5.8 percent in 2013.

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  • Bank Indonesia Keeps Benchmark Interest Rate (BI Rate) at 7.50% in March

    It was decided at the Board of Governors' Meeting (on 13 March 2014) to hold the benchmark interest rate (BI rate) at 7.50 percent, the lending facility rate at 7.50 percent and the deposit facility rate at 5.75 percent. The policy is consistent with ongoing efforts to guide inflation back towards its target corridor of 4.5±1 percent in 2014 and 4.0±1 percent in 2015, as well as to reduce the current account deficit to a more sustainable level. Recent developments indicate that the rate of inflation is under control and the current account deficit is shrinking.

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Latest Columns Bank Indonesia

  • Standard & Poor’s Affirms Indonesia's BB+/stable outlook Sovereign Rating​

    Standard & Poor’s Affirms Indonesia's BB+/stable outlook Sovereign Rating​

    Standard & Poor’s (S&P) affirmed Indonesia's sovereign credit rating at BB+/stable outlook. Favorable fiscal and debt metrics as well as moderately strong growth prospects were cited as the key factors supporting the affirmation of Indonesia's sovereign credit rating. On the other hand, moderately weak institutional strength, low GDP per capita and external vulnerability are factors that can negatively influence the rating. S&P also expects that Indonesia's sustainable economic policies will be maintained after the 2014 presidential election.

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  • Bank Indonesia May Hike Interest Rates to Safeguard Financial Stability

    Bank Indonesia May Hike Interest Rates to Safeguard Financial Stability

    Standard Chartered Bank Economist Eric Sugandi expects that the central bank of Indonesia (Bank Indonesia) will have raised its benchmark interest rate (BI rate) by 50 basis points (bps) to 8.00 percent by the end of 2014. Sugandi also said that it is highly unlikely that Bank Indonesia will lower its BI rate in the next two years amid further Federal Reserve tapering and possible US interest rate hikes in 2015 and 2016. Moreover, the Indonesian government may still decide to reduce fuel subsidies further (thus triggering inflationary pressures).

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  • Bank Indonesia Projects Indonesia's GDP Growth at 5.77% in Q1-2014

    The central bank of Indonesia (Bank Indonesia) expects Indonesia's economic growth to slow to 5.77 percent (year-on-year) in the first quarter of 2014. However, despite this further slowing trend, the institution is content with recent macroeconomic developments: external demand is growing, while domestic demand is moderating, thus impacting positively on the country's current account deficit as well as inflation. Household consumption is expected to have grown in Q1-2014 due to the holding of legislative elections on 9 April 2014.

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  • Bank Indonesia Maintains Benchmark Interest Rate (BI Rate) at 7.50%

    The central bank of Indonesia (Bank Indonesia) decided to maintain its benchmark interest rate (BI rate) at 7.50 percent at the Board of Governors’ Meeting held on Tuesday 8 April 2014. The Lending Facility rate and Deposit Facility rate were held at 7.50 percent and 5.75 percent respectively. This policy is consistent with ongoing efforts to steer inflation back towards its target corridor of 4.5±1 percent in 2014 and 4.0±1 percent in 2015, as well as to reduce the current account deficit to a more sustainable level.

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  • Central Bank of Indonesia Expected to Keep its Key Interest Rate at 7.50%

    Indonesia's benchmark interest rate (BI rate) is expected to be maintained at 7.50 percent at Bank Indonesia's Board of Governor's Meeting on Tuesday 8 April 2014. Despite Indonesia's moderating inflation rate (7.32 percent year on year in March 2014) and the February 2014 trade surplus of USD $785 million, the BI rate may be left unchanged in order to support the further easing of Indonesia's current account deficit and to offset the impact of the possible US interest rate hikes in 2015 and 2016.

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  • Bank Indonesia Press Release: March Inflation and February Trade Balance

    Bank Indonesia Press Release: March Inflation and February Trade Balance

    The rate of inflation in March 2014 demonstrated that the ongoing downward trend persists. In the reporting month of March 2014, inflation was recorded at 0.08 percent (month-to-month) or 7.32 percent (year-on-year), down from the rates recorded in the previous two months at 1.07 percent (mtm) or 8.22 percent (yoy) in January and 0.26 percent (mtm) or 7.75 percent (yoy) in February. The declining inflation trend is further evidenced by a lower rate recorded in March 2014 than the historical average over the past six years at 0.24 percent (mtm).

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  • Contrary to Most Emerging Currencies, Indonesian Rupiah Depreciates

    On Wednesday (26/03), most emerging Asian currencies appreciated against the US dollar as the region's shares hit a two-week high on upbeat US economic data in combination with reduced concern over the crisis in Crimea (Ukraine). However, the Indonesian rupiah exchange rate was one of the exceptions to this trend on today's trading day. Based on the Bloomberg Dollar Index, the rupiah had depreciated 0.16 percent to IDR 11,412 at 16:15 local Jakarta time. Meanwhile, the Chinese yuan recovered some of its earlier losses.

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  • Analysis of Indonesia's Current Account Deficit: the Structural Oil Problem

    Analysis of Indonesia's Current Account Deficit: the Structural Oil Problem

    Fitch Ratings, one of the three major global credit rating agencies, estimates that Indonesia's current account deficit will reach USD $27.4 billion, equivalent to 3.1 percent of the country's gross domestic product (GDP) in 2014. As such, Fitch Ratings' forecast is more pessimistic than forecasts presented by both Indonesia's central bank (Bank Indonesia) and government. Both these institutions expect to curb the current account deficit below the three percent of GDP mark (a sustainable level). Global investors continue to carefully monitor the deficit.

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  • Bank Indonesia: Trade Balance of Indonesia Expected to Improve in 2014

    Bank Indonesia: Indonesia's Trade Balance Will Improve in 2014

    The central bank of Indonesia (Bank Indonesia) believes that the USD $430 million trade deficit that was recorded in January 2014 is a normal result taking into account the implementation of the ban on exports of unprocessed minerals (which reduces exports of materials such as copper and nickel) and seasonal trends as exports are always lower in January than in December due the end of winter peak demand for raw materials and ongoing contractual negotiations at the beginning of each year.

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  • Bank Indonesia's Analysis of February Inflation and January Trade Deficit

    Bank Indonesia's Analysis of February Inflation and January Trade Deficit

    The rate of Indonesian inflation eased in February 2014. Inflation decelerated in February 2014 to 0.26 percent (month-to-month) or 7.75 percent (year-on-year), down from the previous month at 1.07 percent (mtm) or 8.22 percent (yoy) respectively. The drop in the inflation rate is attributable to central and local government policy taken to minimize the second-round effects of recent natural disasters, thereby bringing the inflation of volatile foods in the reporting month to just 0.32 percent (mtm) or 9.85 percent (yoy).

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