Below is a list with tagged columns and company profiles.

Today's Headlines BI Rate

  • Bank Mandiri: Company Profile of Indonesia's Largest Bank by Assets

    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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  • Bank Indonesia Raises its Benchmark Interest Rate (BI Rate) to 7.25%

    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: Slower Growth in Indonesia's Property Sector

    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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  • Credit Growth in Banking Sector Will Fall below 20% after BI Rate Hike

    Indonesia's Credit Growth in Bank Sector Will Fall below 20% after BI Rate Hike

    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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  • Central Bank of Indonesia Raises its Benchmark Interest Rate to 7%

    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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  • Bank Indonesia Plans Extra Board Meeting, Interest Rates May Rise

    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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  • Chatib Basri: GDP Growth Indonesia in 2014 Should Be Revised Down to 6%

    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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  • Bank Indonesia Keeps Key BI Rate at 6.50% to Support Economic Growth

    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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  • Bank Indonesia: Inflation Likely to Ease below 1% in August 2013

    Bank Indonesia: Inflation Likely to Ease below 1% in August 2013

    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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  • Bank Indonesia: Inflation is Expected to Stay Above 8% in 2013

    Bank Indonesia: Inflation is Expected to Stay Above 8% in 2013

    Although it was clear that Indonesia would see a high inflation rate in July 2013 as the impact of higher fuel prices would kick in, Indonesia's central bank (Bank Indonesia) was surprised to see the figure go up to 3.29 percent. Currently, Indonesia's annual inflation rate stands at 8.61 percent. Bank Indonesia's governor Agus Martowardojo said that this rate is far outside the central bank's target range and announced that the institution expects annual inflation to stay above 8%  throughout 2013, higher than its previous assumption of 7.8% at end-2013.

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Latest Columns BI Rate

  • Government Stance on Indonesian Economy and Investors' Reaction

    Last week Friday (30/08), Indonesia's benchmark stock index (IHSG) ended 2.23 percent up to the level of 4,195.09 points, continuing its three-day 'winning streak'. Underlying reasons being the central bank's new policy package (that was released as a response towards the negative impact of global turmoil on Indonesia's financial stability) and the higher benchmark interest rate (BI rate). The BI rate was raised 50 basis points on Thursday (29/08) to 7.0 percent to stabilize the weakening rupiah that fell to IDR 11,000 per US dollar.

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  • Indonesia Stock Exchange (IHSG) Extends 'Winning Streak' on Friday

    The decision of Indonesia's central bank (Bank Indonesia) to raise its benchmark interest rate by 50 basis points to 7.00 percent and its deposit facility (Fasbi) by 0.50 percent to 5.25 percent seem to have had a good impact on the value of Indonesia's stocks and the rupiah. Indonesia's benchmark stock index (IHSG) rose 2.23 percent to 4,195.09 points on Friday (30/08), implying a three-day winning streak. Since the first trading day of this year, the IHSG is down 3.47 percent.

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  • Indonesia Stock Index (IHSG) Continues Rebound with 1.92% Rise

    For the second day in a row Indonesia's benchmark stock index (IHSG) was able to post a gain. Today, it rose 1.92 percent to 4,103.59 points. This rebound is possibly the result of the higher key interest rate. Yesterday, it was announced that the central bank (Bank Indonesia) scheduled an extra meeting to discuss monetary policy. Immediately speculation emerged that the BI rate might be raised by 50 basis points. And indeed it was raised, much to the liking of many investors and analysts.

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  • Current Account Deficit of Indonesia Expected to Ease to 2.5% of GDP

    Indonesia's current account deficit, which caused much alarm among the investor community, is expected to ease to about 2.5 percent of gross domestic product (GDP) in the second half of 2013. This assumption is supported by Indonesia's central bank and various analysts. The country's current account deficit reached USD $9.8 billion or 4.4 percent of GDP in Q2-2013. In combination with the weakening rupiah, higher inflation and the possible end to the Federal Reserve's quantitative easing program, investors have been pulling money out of Indonesia.

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  • Indonesian Government Reacts to the Impact of Global Financial Turmoil

    Despite the announcement of an economic policy package aimed at overcoming the impact of global financial turmoil, Indonesia's main stock index (IHSG) was not able to end the week on a positive note, while the value of the rupiah on the spot market depreciated 1.68 percent to IDR 11,058 per US dollar on Friday (23/08) amid a majority of strengthening Asian currencies, including the Indian rupee (0.67 percent) and the Thai baht (0.28 percent). Based on Bank Indonesia's mid rate, the rupiah fell 4.4 percent against the US dollar to IDR 10,848 last week.

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  • Indonesia's Main Stock Index (IHSG): the Ship that is Rocked by a Storm

    For several weeks now, Indonesia's main stock index (IHSG) has been experiencing a sharp correction. As I wrote in my previous columns, market participants have been waiting for several important macro economic data, to wit Indonesia's economic growth figure for the second quarter of 2013, the July 2013 inflation rate, and the country's trade balance statistics for the first six months of this year. Now all above results have been released, we can analyze further the impact of these macroeconomic results as well as investors' reaction to it.

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  • Profit Taking Turns Indonesia's Stock Index (IHSG) to Red Territory

    After two days of growth, Indonesia's main stock index (IHSG) became victim of profit taking on Thursday (15/08). Particularly domestic investors were eager to sell their Indonesian assets. Falling indices on Wall Street on Wednesday (14/08) in combination with global uncertainty about the end of the Federal Reserve's quantitative easing program made a negative impact on Asian stock indices, including the IHSG. Indonesia's central bank's decision to keep its benchmark interest rate at 6.50% was well-received by most investors.

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  • Amid Mixed Asian Markets Indonesia's Main Index Rises 1.02%

    After Wall Street turned back into the green zone on Tuesday (13/08) and was accompanied by continued rising stock indices in Europe, it provided good support for Asian stock indices on Wednesday (14/08), including Indonesia's main stock index (IHSG). Indonesian mining commodities and plantation stocks fell but these losses were offset by rising big cap stocks (particularly finance stocks) and speculation that Indonesia's central bank will keep its benchmark interest rate (BI rate) at 6.50 percent.

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  • Possible End to Quantitative Easing Will Impact on Emerging Economies

    Possible End to Quantitative Easing Will Impact on Emerging Economies

    Worldwide, most stock indices fell on Wednesday (07/08), particularly Japan's Nikkei index, after it has been speculated that the Federal Reserve may phase out the third round of its quantitative easing program in September 2013. This program, involving a monthly USD $85 billion bond-buying package, aims to spur US economic growth while keeping interest rates low. However, one important side effect has been rising stock markets around the globe. Now the end of QE3 is in sight, investors shy away from riskier assets.

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  • Indonesia's Inflation Rate Accelerates to 3.29% in July 2013

    Indonesia’s inflation rate in July 2013 was significantly higher than analysts had previously estimated. The country’s July inflation figure accelerated to 3.29 percent. On year-on-year basis, it now stands at 8.61 percent, the highest inflation rate since many years. Particularly food commodity and transportation prices rose steeply. The main reason for Indonesia's high inflation is the reduction in fuel subsidies. In late June, the government increased the prices of subsidized fuels in order to relieve the ballooning budget deficit.

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