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Today's Headlines BI Rate

  • Rupiah Indonesia Update: Longest Winning Streak since 2010. Why?

    Rupiah Indonesia Update: Longest Winning Streak since 2010. Why?

    In line with the overall trend in Asia, the Indonesian rupiah continued to appreciate against the US dollar on Wednesday (02/03). Based on the Bloomberg Dollar Index the rupiah strengthened 0.34 percent to IDR 13,301 per US dollar, touching a four and a halve-month high and recording its longest winning streak since 2010. Over the past ten trading days the rupiah has been appreciating against the greenback. What made the Indonesian rupiah strengthen today?

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  • Indonesia's Manufacturing Sector: Contracting for 17 Straight Months

    Indonesia's Manufacturing Sector: Contracting for 17 Straight Months

    For the 17th straight month Indonesia's manufacturing sector contracted. Based on the latest survey from Nikkei, the Indonesia Manufacturing Purchasing Managers' Index (PMI) showed a reading of 48.7 in February 2016, slightly down from a reading of 48.9 in the preceding month (a reading below 50 indicates that manufacturing activity has contracted). It confirms that both global and domestic growth remained subdued in the first months of 2016, hence new orders continued to decline, while unemployment rose.

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  • Optimism about Indonesia's Property Sector, despite Tax Amnesty Bill Delay

    Optimism about Indonesia's Property Sector, despite Tax Amnesty Bill Delay

    Stakeholders in Indonesia's property sector may regret to learn that Indonesia's House of Representatives (DPR) decided to postpone deliberations on the tax amnesty bill until (at least) April 2016. This tax amnesty bill, originally planned to be implemented in early 2016, offers attractive tax rates to those tax evaders who declare untaxed wealth and repatriate their funds to Indonesia. If implemented in early 2016, then the bill was estimated to generate up to USD $4.4 billion in additional tax revenue in 2016. Meanwhile, part of repatriated funds would find their way into the nation's property sector.

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  • Indonesia Investments' Newsletter of 21 February 2016 Released

    Indonesia Investments' Newsletter of 21 February 2016 Released

    On 21 February 2016, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website over the last seven days. Most of the topics involve economic matters such as new rules regarding banks' net interest margin, an update on Indonesia's trade balance, interest rates, the 2016 State Budget, the coal industry, the cement industry, and more.

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  • Financial Authorities to Cut Indonesia's Lending & Mortgage Rates

    Financial Authorities to Cut Indonesia's Lending & Mortgage Rates

    The Indonesian government, central bank (Bank Indonesia) and the Financial Services Authority (OJK) have formed a team that will study and encourage lower lending and mortgage rates in Indonesia - to single digit levels - by the end of 2016. Indonesia's Chief Economics Minister Darmin Nasution explained that this is part of government efforts to boost economic activity in Southeast Asia's largest economy. Indonesia's lending rates have been high due to banks' prudent management and the high cost of funds, hence limiting credit growth as well as economic growth.

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  • Bank Indonesia Cuts BI Rate to 7%, Reserve Requirement to 6.5%

    Bank Indonesia Cuts BI Rate to 7%, Reserve Requirement to 6.5%

    In line with expectations, the central bank of Indonesia (Bank Indonesia) cut its benchmark interest rate (BI rate) by 25 basis points to 7.0 percent at its February Board of Governor's policy meeting. Its overnight deposit facility rate (known as Fasbi) and lending facility rate were also cut by 0.25 percent to 5.00 percent and 7.50 percent, respectively. After the rate cut in January it was the second straight month of lower borrowing costs in Southeast Asia's largest economy. Meanwhile, Bank Indonesia also cut the reserve-requirement ratio for rupiah deposits at commercial banks by 100 basis points to 6.5 percent.

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  • Indonesia's Rupiah under Pressure Ahead of BI Rate Announcement

    Indonesia's Rupiah under Pressure Ahead of BI Rate Announcement

    Today, Bank Indonesia will start its February two-day policy meeting. Markets are eagerly awaiting whether the central bank of Indonesia will indeed cut its key interest rate (BI rate) again. Last month, it had cut the BI rate by 0.25 percent to 7.25 percent as inflation, the current account deficit and the rupiah rate were all under control. Although the rate cut was welcomed by the business community it was considered not enough to push borrowing costs lower in Southeast Asia's largest economy hence unable to boost economic activity significantly.

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  • Currency Indonesia: Why is the Rupiah Strengthening Markedly Today?

    Currency Indonesia: Why is the Rupiah Strengthening Markedly Today?

    The Indonesian rupiah is appreciating markedly on Wednesday (10/02). By 12:30 pm local Jakarta time, Indonesia's currency had appreciated 1.62 percent to IDR 13,391 per US dollar based on the Bloomberg Dollar Index, a three-month high. Today, most emerging currencies in Asia are appreciating against the US dollar ahead of Fed Chair Janet Yellen's testimony in US Congress this week. Other factors that support strong rupiah appreciation are speculation that Indonesia will attract investors due to accelerating domestic economic growth and the move of Japan's central bank to introduce negative interest rates.

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  • Currency News Update: Indonesian Rupiah Under Pressure

    Currency News Update: Indonesian Rupiah Under Pressure

    The Indonesian rupiah has been under pressure so far today (03/02) on concern that falling oil prices drag down other commodity prices, hence negatively affecting Indonesia's export performance. Yesterday, a global selloff in stocks occurred as oil prices were again touching the USD $30 per barrel mark. Emerging market currencies too are under pressure. The Indonesian rupiah had depreciated 0.79 percent to IDR 13,799 per US dollar (Bloomberg Dollar Index) by 12:55 pm local Jakarta time.

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  • Indonesia Investments' Newsletter of 17 January 2016 Released

    Indonesia Investments' Newsletter of 17 January 2016 Released

    On 17 January 2016, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website over the last seven days. Most of the topics involve economic matters such as the trade balance, property sector, the benchmark interest rate, the ASEAN Economic community, but also the recent terrorist attacks in Jakarta, and more.

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Latest Columns BI Rate

  • Bank Indonesia's 7.50% Policy Rate in Line with Current Economic Conditions

    Bank Indonesia's 7.50% Policy Rate in Line with Current Economic Conditions

    In Bank Indonesia's board of governors' meeting, which was held on Thursday (12/12), it was decided to maintain the country's benchmark interest rate (BI rate) at 7.50 percent. This decision was in line with market expectation but was unable to support the Jakarta Composite Index and rupiah exchange rate. The lending facility and deposit facility interest rates were also maintained at 7.50 percent and 5.75 percent respectively. Bank Indonesia decided not to change the rate as Indonesia's inflation outlook for 2014 is still within target.

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  • Sales of Ceramics in Indonesia Expected to Plunge 10% in 2014

    Sales of Ceramics in Indonesia Expected to Plunge 10% in 2014

    With slowing economic growth and a stricter monetary policy approach of the central bank, Indonesia's ceramic industry is expected to record slowing growth in 2014. This year, the country's ceramic sales are projected to amount to 400 million square meters (m²). About 12 percent of this amount is exported to countries abroad. However, in 2014, sales are expected to plunge by 5 to 10% to 360-380 million m². A weakening rupiah and slowing property sector, which accounts for significant ceramic demand, are the major causes of the decline.

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  • Investors Concerned Ahead of Bank Indonesia Board of Governor's Meeting

    Both the Jakarta Composite Index (Indonesia's benchmark stock index) and the Indonesia rupiah exchange rate are under pressure this morning as market participants are waiting for results of the central bank's Board of Governor's meeting that is held today (12/12) in Jakarta. Speculation has emerged that Indonesia's central bank (Bank Indonesia) will raise its benchmark interest rate (BI rate) one more time in 2013 in order to combat the country's current account deficit as well as mitigate the impact of a possible winding down of QE3.

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  • Despite Unchanged BI Rate, Indonesia's Stock Index and Rupiah Down

    Although Indonesia's benchmark interest rate (BI rate) was kept at the level of 7.5 percent (in line with market expectation) today (12/12), it was not able to support the country's stock index. Indonesia's IHSG index fell 1.39 percent to 4,212.22 points. The index was negatively impacted by Asian stock indices that were down due to concerns about the looming end of the Federal Reserve's quantitative easing program. This made investors' positive reaction to the BI rate of temporary nature. Weak openings in Europe increased downward pressure.

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  • Business as Usual in Indonesia: a Day of Gain is Followed by a Day of Loss

    Business as Usual: a Day of Gain is Followed by a Day of Loss

    One of the main problems of Indonesia's benchmark stock index (IHSG) is the profit taking that immediately happens after a day of strong growth. On Wednesday (11/12), the IHSG index was plagued by profit taking since the start of the first trading session. Moreover, the index was impacted by mostly falling Asian stock indices as well as the Indonesia rupiah exchange rate which went above the IDR 12,000 per US dollar level again. The only support the IHSG received was just before its closing when European indices opened up.

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  • Indonesia Rupiah Exchange Rate: Fluctuating Performance on Monday

    After appreciating on Monday morning (09/12), the Indonesia rupiah exchange rate started to weaken against the US dollar in the afternoon. At 15:10:29 local Jakarta time, the rupiah stood at IDR 11,970 per US dollar in the Bloomberg Dollar Index, a 0.05 percent depreciation from the start of the day. The rupiah exchange rate is fluctuating due to positive sentiments caused by Indonesia's October trade surplus as well as China's low inflation and negative sentiments brought on by the looming end of the Federal Reserve's quantitative easing program.

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  • Monthly Economic Review: Overview of Indonesia's Macroeconomic Data

    ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the November 2013 edition, a number of important issues that are monitored include Indonesia's inflation rate, the trade balance, the current account deficit, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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  • Indonesia Rupiah Exchange Rate: How Will Bank Indonesia Respond?

    In the morning of Thursday (05/12), Indonesia's rupiah exchange rate depreciated beyond the psychological level of IDR 12,000 per US dollar. In the Bloomberg Dollar Index, the rupiah fell 0.2 percent to IDR 12,011 as of 09:19:49. The main factor behind this decline is market participants' concerns about the end of the Federal Reserve's monthly USD $85 billion bond buying program. It is increasingly speculated that the winding down of this program will start sooner than expected.

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  • Indonesia's Jakarta Composite Index (IHSG) and Rupiah Continue Decline

    Indonesia's Jakarta Composite Index (IHSG) and Rupiah Continue Decline

    The continued presence of negative market sentiments made it impossible for Indonesia's Jakarta Composite Index (IHSG) to rebound. The looming end of the FED's quantitative easing program - which may be wound down sooner than expected - is a big cause for concern. The depreciating Indonesia rupiah exchange rate intensifies these concerns, particularly regarding companies that have exposure to volatile US dollar movements. Furthermore, investors are waiting for further US economic data as well as for Bank Indonesia's next meeting.

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  • Indonesia Inflation Update: Consumer Price Index Moving Sideways

    Indonesia Inflation Update: Consumer Price Index Moving Sideways

    The inflation rate of Indonesia rose slightly in November 2013 (month-to-month) and confirms estimations that inflation in Southeast Asia's largest economy is under control after having accelerated sharply due to the introduction of higher subsidized fuel prices June 2013. In recent months, inflation moved sideways and is expected to ease considerably in the first quarter of 2014. Indonesia's consumer price index rose 0.12 percent in November due to rising electricity, processed foods and health care costs.

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