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Today's Headlines Bank Indonesia

  • FY 2016 Inflation to Fall Within Bank Indonesia's Target

    FY 2016 Inflation to Fall Within Bank Indonesia's Target

    The central bank of Indonesia (Bank Indonesia) expects inflation to reach the range of 0.50-0.60 percent month-on-month (m/m) in December 2016 as Christmas and New Year celebrations, traditionally, give rise to higher consumer spending. The projection would also imply that full-year inflation will fall well within Bank Indonesia's target range of 3.0 - 5.0 percent (y/y) in 2016 (year-to-date, Indonesian inflation has accumulated to 2.59 percent), the second straight year of mild inflation (for Indonesian standards).

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  • Foreign Exchange Reserves Indonesia Fell in November 2016

    Foreign Exchange Reserves Indonesia Fell in November 2016

    The central bank of Indonesia (Bank Indonesia) announced that the country's foreign exchange reserves fell to USD $111.5 billion at the end of November 2016, from USD $115.0 billion in the preceding month. The USD $3.5 billion decline was caused by Bank Indonesia's efforts to stabilize the rupiah exchange rate as well as the government's external debt repayments. Despite the decline, Bank Indonesia regards the current level of forex reserves as healthy.

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  • Bank Indonesia Remains Positive Despite Outflows after Trump Win

    Bank Indonesia Remains Positive Despite Outflows after Trump Win

    The central bank of Indonesia (Bank Indonesia) informed that around IDR 30 trillion (approx. USD $2.26 billion) of capital outflows from Indonesia occurred after Donald Trump was chosen as 45th US president in November. His victory caused a high degree of uncertainty about future US political and economic policies, while markets also expect to see a stronger US economy as Trump is expected to focus on the interests of the USA, and not so much on its impact on the international community.

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  • Current Account Balance Indonesia: Deficit Eases to 1.83% of GDP in Q3

    Current Account Balance Indonesia: Deficit Eases to 1.83% of GDP in Q3-2016

    The central bank of Indonesia (Bank Indonesia) announced that the nation's current account deficit (CAD) eased to 1.83 percent of gross domestic product (GDP) in the third quarter of 2016, improving from a revised 2.2 percent of GDP deficit in the preceding quarter. Bank Indonesia further informed that the CAD will most likely remain in the range of 2.0 - 2.5 percent of GDP in full-year 2016. In 2015 Indonesia's CAD eased to 2.1 percent of GDP. Since late-2011 Southeast Asia's largest economy has had to cope with a wide current account deficit.

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  • Economy of Indonesia: Financial Sector is Stable, Says KSSK

    Economy of Indonesia: Financial Sector is Stable, says KSSK

    The Financial System Stability Committee (in Indonesian: Komite Stabilitas Keuangan, or KSSK) stated that Indonesia's economy is stable. The KSSK further informed that it will raise efforts to enhance market confidence in Indonesia's financial sector. The KSSK, an Indonesian institution that is responsible for preventing financial crises, consists of a selection of key policymakers from the Finance Ministry, Bank Indonesia, Financial Services Authority (OJK) and Deposit Insurance Corporation (LPS).

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  • Current Account Balance Update Indonesia: Deficit is Improving

    Current Account Balance Update Indonesia: Deficit is Improving

    The central bank of Indonesia (Bank Indonesia) expects Indonesia's current account deficit to have improved to below 2 percent of the country's gross domestic product (GDP) in the third quarter of 2016. This is good news as a wide (and structural) current account deficit is considered a financial weakness because it means the country is building up liabilities to the rest of the world. Ever since late-2011 Indonesia has been suffering a wide current account deficit. This is particularly attributed to the globe's low commodity prices after 2011.

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  • Consumer Confidence in Indonesia Fell Slightly in September

    Consumer Confidence in Indonesia Fell Slightly in September

    According to the latest survey of Indonesia's central bank (Bank Indonesia), consumer confidence in Southeast Asia's largest economy fell 3.3 points to 110 in September 2016 (a reading above 100.0 indicates optimism). Consumer confidence somewhat weakened as the Indonesian people expect upward price pressures at the year-end, specifically rising prices of processed food, beverages, cigarettes, tobacco and groceries. Meanwhile, respondents also expect to put less money in savings in the next six months.

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  • Bank Indonesia: Room for Monetary Easing in Indonesia

    Bank Indonesia: Room for Monetary Easing in Indonesia

    Agus Martowardojo, Governor of Indonesia's central bank (Bank Indonesia), says there remains room for monetary easing in Southeast Asia's largest economy in the last few months of 2016, provided that both the domestic and global context remain conducive. However, Martowardojo did not specify what this monetary easing exactly entails: a lower key interest rate, cutting the primary minimum statutory reserves (in Indonesian: giro wajib minimum primer), or macro-prudential policy easing? Whatever the move may be, it will for sure be data-dependent, Martowardojo emphasized.

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  • Foreign Exchange Reserves Indonesia Rise in August 2016

    Foreign Exchange Reserves Indonesia Rise in August 2016

    The central bank of Indonesia (Bank Indonesia) reported that the country's foreign exchange reserves rose by USD $2.1 billion to USD $113.5 billion in August 2016 on the back of tax revenues, oil and gas export earnings, the withdrawal of public foreign debt, and the selling of foreign currency-denominated Bank Indonesia Securities (SBBIs). Inflows of foreign currency exceeded the amount that Indonesian authorities had to pay for foreign debt settlements and maturing SBBIs.

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  • Bank Indonesia Sees GDP Growth at 4.9% - 5.3% in 2016

    Bank Indonesia Sees GDP Growth at 4.9% - 5.3% in 2016

    At the latest policy meeting, Indonesia's central bank (Bank Indonesia) not only adopted a new benchmark monetary tool (the BI seven-day reverse repo rate) but also announced that it cut its forecast for economic growth in 2016. Earlier, Bank Indonesia estimated Indonesia's GDP growth in full-year 2016 in the range of 5.0 - 5.4 percent (y/y). However, it slightly cut its projection to the range of 4.9 - 5.3 percent (y/y) due to the government's decision to curtail expenditure by IDR 133.8 trillion (approx. USD $10.1 billion).

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Latest Columns Bank Indonesia

  • 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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  • Optimism about the Performance of the Indonesian Rupiah Rate in 2014

    Optimism about the Performance of Indonesian Rupiah Rate in 2014

    The central bank of Indonesia (Bank Indonesia) is optimistic that the country's currency will continue to appreciate against the US dollar in the first quarter of 2014. Executive Director at the Economic and Monetary Policy Department of Bank Indonesia Juda Agung said that there are two factors that impact positively on the performance of the Indonesian rupiah exchange rate: the improved global economy and strengthening domestic economic fundamentals. However, Agung declined to estimate the value of the rupiah by the end of Q1-2014.

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  • Bank Indonesia: Export Ban Causes Slowing Economy Eastern Regions

    Bank Indonesia: Export Ban Causes Slowing Economic Growth in Eastern Regions

    The central bank of Indonesia (Bank Indonesia) believes that Indonesia's recently introduced ban on the export of unprocessed minerals, in effect since 12 January 2014, will result in slowing economic growth in several regions in the eastern part of Indonesia as these regions are main sources of mineral production. Doddy Zulverdi, Head of the Economic Assessment Group in Bank Indonesia's Department of Economic and Monetary Policy, said that Sulawesi and Kalimantan will post slowing economic growth this year.

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