Moody's Investors Service, one of the big credit rating agencies, stated in its 'Credit Analysis: Indonesia' report that - despite the ongoing current account deficit (which is considered to be structural) and a relatively shallow and volatile domestic capital market (which contributes to Indonesia’s reliance on external funding) - the agency is positive about Indonesia's outlook due to its growth prospects, narrow fiscal deficits and low public debt. Indonesian government bonds are rated at Baa3, which is Moody's lowest investment-grade status.

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An updated profile of Bank Mandiri is presented in our Indonesian Companies' section. Bank Mandiri, which is Indonesia’s largest financial institution by assets, offers businesses and individuals throughout Indonesia a full set of banking and non-banking products and services. The bank was established as a result of the Asian Financial Crisis when four state-owned banks (Bank Exim, Bank Bumi Daya, Bank Dagang Negara and Bapindo) were merged into Bank Mandiri as part of the government's bank restructuring program.

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The central bank of Indonesia (Bank Indonesia) has raised its benchmark interest rate (BI rate) and deposit facility rate (Fasbi) by 25 basis points to 7.25 percent and 5.50 percent respectively on Thursday (12/09). It is the fourth time since June that Bank Indonesia raised the interest rate. Previously, it maintained a historic low BI rate of 5.75 percent for 16 months. The increase is one of the measures taken to control inflation, stabilize the rupiah exchange rate and to ensure that the current account deficit is managed to a sustainable level.

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Fitch Ratings, the global rating agency, expects slower growth in Indonesia's property sector for the next 12 months. However, for the longer term, the institution still maintains a positive outlook as Indonesia is characterized by high urbanization, a rapidly expanding middle class and low mortgage rates. Since the revival in 2011, the average selling price of Indonesia's residential properties increased by about 30 percent year-on-year, particularly in the Greater Jakarta area.

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According to Indonesia's central bank (Bank Indonesia), the higher benchmark interest rate (BI rate) will slow down credit growth in the Indonesian banking sector from a current pace of 19.6 percent (after second week of August 2013) to around 18 percent. The BI rate was raised to 7.0 percent last week. Besides the BI rate, both the lending facility rate and the deposit facility rate (Fasbi) were raised to 7.0 percent and 5.25 percent respectively to support the rupiah, while curbing inflationary pressures.

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Indonesia's central bank (Bank Indonesia) decided to raise its benchmark interest rate (BI rate) by 50 basis points to 7.0 percent on Thursday (29/08) in order to support the weakening rupiah amid slowing global economic growth. The rupiah has been on a long losing streak and has fallen to its lowest level against the US dollar in four years. The BI rate had already been raised in June and July from a historically low 5.75 percent to 6.50 percent. Today, an extra meeting was scheduled to discuss policy measures.

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Governor of the central bank of Indonesia (Bank Indonesia) Agus Martowardojo said that the central bank will respond to current market conditions on Thursday (29/08). Bank Indonesia will have an extra board meeting to discuss measures to safeguard Indonesia's financial stability. It will touch matters such as macro-prudential policy, the interest rate and currency control. Normally, the central bank meets once per month but Martowardojo felt that this extra meeting is needed as the next scheduled meeting (12/09) is too far away.

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Finance minister Chatib Basri said that the Indonesian government should revise its outlook for GDP growth in 2014 from 6.4% (mentioned in the 2014 State Budget) to about 6.0%. A more realistic outlook, which is in line with the current global and domestic financial context, is needed. Global uncertainty due to the possible ending of the Federal Reserve's quantitative easing program has resulted in capital outflows from emerging markets, including Indonesia. Various countries, developed and emerging ones, have lowered outlooks for 2014 GDP growth.

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Indonesia's central bank, Bank Indonesia, decided today (15/08) to keep its benchmark interest rate (BI rate) at 6.50 percent. In recent days, heavy speculation emerged about whether Bank Indonesia would raise the BI rate for the third consecutive time in three months as the country is plagued by higher inflation (8.61 percent year-on-year in July 2013) and a weakening rupiah. Reluctance to raise the interest rate again seems to indicate that the Bank gives priority to economic growth, which has slid to a three-year low at 5.81 percent in Q2-2013.

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Indonesia's central bank expects that the country's monthly inflation rate will ease to below one percent in August. However, in order to meet this expectation the bank stresses that there needs to be an improvement in the food product supply through imports and good distribution practice. The latter, particularly, is problematic due to Indonesia's lack of quality and quantity in infrastructure. In July, monthly inflation rose 3.29 percent due to the start of the new school year and impact of higher subsidized fuel prices.

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The central bank of Indonesia (Bank Indonesia) decided to leave its interest rate environment unchanged at the January 2017 policy meeting on Thursday (19/01). The benchmark seven-day reverse repurchase rate (BI 7-day RR Rate) was kept at 4.75 percent, while the Deposit Facility and Lending Facility rates were maintained at 4.00 percent and 5.50 percent, respectively. The decisions of Bank Indonesia are in line with analysts' forecasts. Due to risks of capital outflows Indonesia's central bank had few room to ease monetary policy.

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Bank Indonesia, the central bank of Indonesia, kept its benchmark interest rate unchanged at the December 2016 policy meeting, nearly a day after the US Federal Reserve decided to raise its key Fed Funds Rate by 25 basis points to the range 0.50 - 0.75 percent. Moves of both central banks were expected. Monetary tightening in the USA triggers capital outflows from emerging markets (the Indonesian rupiah depreciated around 0.70 percent against the US dollar on Thursday). Therefore, Bank Indonesia had little room to seek monetary easing.

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The Bank of Indonesia recently resorted to a sudden cut in interest rate (by 25 bps to 4.75 percent) at its 20th October 2016 meeting. This followed a 25 bps reduction in September and thus this is the sixth time this year that the Indonesian central bank has elected to loosen monetary policy.

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In line with expectations Indonesia's central bank (Bank Indonesia) kept its benchmark reference rate - the BI 7-Day (Reverse) Repo Rate - at 4.75 percent at Thursday's policy meeting (17/11). This decision was made amid the high degree of uncertainty in global financial markets (triggered by the 2016 US presidential election) and stable domestic conditions (low inflation and an improving current account deficit). The high degree of volatility does cause major pressures on the rupiah and therefore Bank Indonesia will continue to stabilize exchange rates through intervention in markets.

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Bank Indonesia surprised markets. On Thursday (20/10) the central bank of Southeast Asia's largest economy cut its benchmark interest rate - the BI 7-day reverse repo rate - by 25 basis points to 4.75 percent. Meanwhile, both the deposit facility and lending facility were also cut by 25 basis points to 4.00 percent and 5.50 percent, respectively. Perhaps it was Bank Indonesia's present to Indonesian President Joko Widodo for the two-year anniversary of his government. A lower interest rate climate should encourage macroeconomic expansion.

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On September 22, 2016, the central bank of Indonesia (Bank Indonesia) decided to cut its BI seven-day repo rate from 5.25 percent to 5.00 percent, and this has changed parts of the long-term outlook for investors. Bank Indonesia also reduced its lending rate to 5.75 percent (from previous 5.50 percent), and the deposit rate to 4.50 percent (from previous 4.75 percent previously). This is significant because it shows that lending rates and interest rates have dropped to multi-year lows with the current policy changes.

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The central bank of Indonesia (Bank Indonesia) has made some important decisions under the current Governor Agus Martowardojo. Here, Bank Indonesia has been directed toward achieving the responsibility of making financial decisions that promote consumer price stability over the long-term. This has resulted in widespread gains in the rupiah against a basket of world currencies -- including the US dollar. But recent rate cuts now have the potential to reverse these broader trends.

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The central bank of Indonesia kept the BI seven-day reverse repo rate (7-day RR Rate) at 5.25 percent after its two-day August policy meeting (18-19 august 2016). At this policy meeting Bank Indonesia adopted the 7-day RR Rate as the nation's new benchmark monetary tool, replacing the BI rate that failed to influence markets significantly: despite the BI Rate having been cut from 7.50 percent to 6.50 percent so far this year, Indonesia's lending rates did not drop accordingly.

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This week the central bank of Indonesia (Bank Indonesia) is set to adopt the seven-day reverse repurchase rate (reverse repo) as the nation's new benchmark monetary tool at the August policy meeting (18/19 August), thus replacing the existing BI rate that is considered too weak to have an immediate and significant impact on Indonesia's borrowing costs and market liquidity. Bank Indonesia Governor Agus Martowardojo informed that the central bank has been holding road shows to financial centers across the nation (and abroad) to provide detailed information about the new benchmark.

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At its latest monthly policy meeting the central bank of Indonesia (Bank Indonesia) left its interest rate regime unchanged with the benchmark BI rate at 6.50 percent (this month the bank is set to adopt the seven-day reverse repurchase rate - reverse repo - as the new benchmark rate). Bank Indonesia's decision to leave interest rates unchanged was a surprise move given that the nation's inflation is low, the rupiah is strengthening, but overall economic growth has remained sluggish. This context would actually justify a moderate interest rate cut of 25 basis points.

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