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Today's Headlines Bank Indonesia

  • 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

    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

    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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  • January's Slowing Credit Growth in Line with Bank Indonesia's Directive

    Credit growth in Indonesia's banking sector slowed in January 2014 to a growth pace of 20.9 percent (year-on-year), down from 21.4 percent (yoy) in the previous month. Total disbursed credit in January 2014 stood at IDR 3,287 trillion (USD 285 billion). The slowing pace of credit disbursement in Southeast Asia's largest economy is in accordance with the central bank's target to reduce credit growth in the banking sector to between 15 and 17 percent (yoy), said Agus Martowardojo, Governor of Bank Indonesia.

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  • Mixed Predictions about Interest Rate Policy Decision of Bank Indonesia

    Tomorrow (13/03), Bank Indonesia will hold its next Board of Governor's Meeting to discuss general policies in the monetary field. As usual, market participants are highly interested in the central bank's assessment of the country's economic fundamentals and interest rates policy. However, predictions about Bank Indonesia's stance toward its benchmark interest rate (BI rate) are mixed. Some expect it to be kept at 7.50 percent as inflation has been under control. Others anticipate a 0.25 percent hike due to the country's weak exports.

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  • Retail Sales Remain Strong on Robust Private Consumption in Indonesia

    The latest survey of Indonesia's central bank (Bank Indonesia) indicates that domestic private consumption and household consumption in Indonesia remain strong, evidenced by a 28.4 percentage growth (year-on-year) of retail sales in January 2014. This growth was particularly supported by strong sales of information and communication equipment. These sales rose 75 percent (yoy). Traditionally, Indonesia's private consumption accounts for about 55 percent of the country's total annual economic expansion.

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