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Today's Headlines BI Rate

  • Bank Indonesia Expects Inflation to Ease below 7% y/y in September 2015

    Bank Indonesia Expects Inflation to Ease below 7% y/y in September 2015

    The central bank of Indonesia (Bank Indonesia) estimates that inflation will ease below seven percent year-on-year (y/y) in September 2015 on the back of lower prices of raw foods and lower administered prices (including fuel and electricity) in the post the Ramadan and Idul Fitri period. Bank Indonesia Governor Agus Martowardojo said the central bank expects inflation at around 6.95 percent (y/y) in September.

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  • Indonesia Investments' Newsletter of 20 September 2015 Released

    Indonesia Investments' Newsletter of 20 September 2015 Released

    On 20 September 2015, 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 in the last seven days. Most of the topics involve economic subjects such as the impact of the US Federal Reserve’s monetary policy on Indonesian assets, Indonesia’s key interest rate, the trade balance, foreign debt, the banking sector, poverty, and much more.

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  • Bank Indonesia Leaves Interest Rates Unchanged to Support Rupiah, Combat Inflation

    Bank Indonesia Leaves Interest Rates Unchanged to Support Rupiah, Combat Inflation

    In line with expectation, the central bank of Indonesia (Bank Indonesia) decided to keep its key interest rate (BI rate) at 7.50 percent for a seven consecutive month in September’s Board of Governor’s meeting (17/09) as it aims to stabilize the rupiah amid global volatility caused by looming higher US interest rates and China’s hard landing (as well as yuan depreciation), while combating inflation which stood at 7.18 percent (y/y) in August. The overnight deposit facility rate and lending facility rate were left unchanged at 5.5 percent and 8 percent, respectively.

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  • Bank Indonesia Expected to Keep Key Interest Rate at 7.50% at Policy Meeting

    Bank Indonesia Expected to Keep Key Interest Rate at 7.50% at Policy Meeting

    With all eyes on the two-day policy meeting of the Federal Reserve, we could almost forget that the central bank of Indonesia (Bank Indonesia) will also hold its monthly policy meeting today. Similar to the topic discussed in the Federal Open Market Committee (FOMC) meeting (16-17 September), Bank Indonesia may consider raising its key interest rate (BI rate) as a Fed Fund Rate hike would trigger capital outflows, while Indonesia’s inflation rate remains high and the rupiah is fragile.

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  • Bank Indonesia Cuts 2016 Forecast Economic Growth Indonesia, Keeps High BI Rate

    Bank Indonesia Cuts 2016 Forecast Economic Growth Indonesia, Keeps High BI Rate

    For the second time, the central bank of Indonesia (Bank Indonesia) cut its 2016 forecast for economic growth in Indonesia, Southeast Asia’s largest economy. Due to persistent low commodity prices and weak export figures, the central bank now estimates that Indonesia’s economy will grow in the range of 5.2 - 5.6 percent (y/y) next year, down from its earlier outlook of 5.3 - 5.7 percent and the initial outlook of 5.4 - 5.8 percent.

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  • Inflation Forecast Update Indonesia: What about Inflation in August?

    Inflation Forecast Update Indonesia: What about Inflation in August?

    Most analysts expect that Indonesian inflation will accelerate to around 7.43 percent (year-on-year) in August 2015 primarily due to imported inflation. As the Indonesian rupiah has been depreciating against the US dollar over the past couple of weeks while the central government recently raised import duties for a wide range of consumer products, inflationary pressures are estimated to rise.

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  • Indonesia Investments' Newsletter of 23 August 2015 Released

    Indonesia Investments' Newsletter of 23 August 2015 Released

    On 23 August 2015, 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 in the last seven days. Most of the topics involve economic subjects such as Indonesian stocks and the rupiah, the July trade balance, Bank Indonesia’s interest rates, the 2016 State Budget draft, geothermal power development, land rights available to foreign investors, and more.

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  • What Influenced the Indonesian Rupiah? Central Bank Intervention

    What Influenced the Indonesian Rupiah? Central Bank Intervention

    Just before the market closed on Tuesday (18/08) the Indonesian rupiah experienced a remarkable recovery, signalling that the country’s central bank (Bank Indonesia) intervened to support the ailing currency (after Malaysia’s ringgit, the rupiah is the second-worst performing emerging currency in Asia so far this year, weakening 11.2 percent against the US dollar). Today, based on the Bloomberg Dollar Index, the Indonesian rupiah was gradually falling toward IDR 13,860 per US dollar until it suddenly appreciated markedly.

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  • Bank Indonesia Keeps Interest Rates Unchanged on Global Uncertainty

    Bank Indonesia Keeps Interest Rates Unchanged on Global Uncertainty

    For the sixth straight month, the central bank of Indonesia (Bank Indonesia) left its interest rate regime unchanged at Tuesday’s Board of Governor’s meeting (18/08) as it aims to guard the rupiah against severe volatility (which occurred after China’s yuan was allowed to devalue, while markets are still preparing for monetary tightening in the USA) and tries to combat inflation.

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  • No Independence Day for the Indonesian Rupiah: Foreign Pressures Persist

    No Independence Day for the Indonesian Rupiah: Pressures Persist

    Although influence of the devaluation of China’s yuan has eased, the Indonesian rupiah remains under pressure as investors are waiting for results of Bank Indonesia’s Board of Governor’s meeting (to be held later today), low oil (and other commodity) prices, while the US dollar appreciates against most other currencies amid mixed US macroeconomic data. Based on the Bloomberg Dollar Index, the rupiah had depreciated 0.12 percent to IDR 13,838 per US dollar by 10:30 am local Jakarta time on Tuesday (18/08).

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Latest Columns BI Rate

  • Bank Indonesia Leaves Interest Rates Unchanged at July Policy Meeting

    Bank Indonesia Leaves Interest Rates Unchanged at July Policy Meeting

    Contrary to expectations, the central bank of Indonesia (Bank Indonesia) left its monetary policy unchanged at the July policy meeting. The benchmark interest rate (BI rate) was kept at 6.50 percent, while the deposit facility rate and lending facility rate were kept at 4.50 percent and 7.00 percent, respectively. The 7-day reverse repurchase rate, which is set to become the central bank's new benchmark on 19 August 2016 - replacing the BI rate - was left at 5.25 percent.

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  • Bank Indonesia's Loosening Monetary Policy: Impact of Lower Interest Rates

    Bank Indonesia's Loosening Monetary Policy: Impact of Lower Interest Rates

    In the first three policy meetings of 2016, Indonesia's central bank (Bank Indonesia) cut its benchmark BI rate gradually yet aggressively from 7.50 percent to 6.75 percent as inflation, the rupiah rate and Indonesia's current account deficit were regarded as 'under control'. At the same time, Indonesia's lender of last resort acknowledged the BI rate has failed to influence borrowing costs and market liquidity effectively and therefore decided to adopt the seven-day reverse repurchase rate (reverse repo) as the nation's new benchmark starting from August 2016.

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  • Indonesian Companies in Focus: Astra International Facing Challenges

    Indonesian Companies in Focus: Astra International Facing Challenges

    One of the leading diversified conglomerates in Indonesia, Astra International, is facing challenges. Demand for cars has been on the decline in Indonesia over the past two years. This is a big challenge for the company because the automotive sector accounts for about half of Astra's total earnings. Meanwhile, its heavy equipment & mining segment and the financial services segment have been under severe pressure. Net income in the heavy equipment & mining segment plunged 55 percent (y/y) in Q1-2016, while net income in the financial services segment tumbled 46 percent (y/y) over the same period.

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  • HSBC: Indonesia's Economic Growth 5% in 2nd Quarter of 2016

    HSBC: Indonesia's Economic Growth 5% in 2nd Quarter of 2016

    Although Indonesia's economic growth in the first quarter of 2016 was below analysts' estimates, most analysts agree that the nation's economic growth in the second quarter of the year could reach 5 percent (y/y), supported by domestic consumption and capital inflows. In Q1-2016 Indonesia's economic growth climbed at a pace of 4.92 percent (y/y) - accelerating from the 4.73 percent (y/y) GDP growth pace in the same quarter one year earlier - but significantly below estimates of most analysts. For example, Bank Indonesia expected GDP growth around 5.1 - 5.2 percent (y/y).

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  • Indonesia in April: State Budget & 7-day Reverse Repurchase Rate

    Indonesia in April: State Budget & 7-day Reverse Repurchase Rate

    If we look back on the month of April, two important matters - related to the economy - occurred in Indonesia this month: (1) in the first week of April, the Indonesian government managed to complete the Revised 2016 State Budget (RAPBN-P 2016), and, one week later, (2) the central bank (Bank Indonesia) announced it will adopt a new benchmark monetary tool per 19 August 2016 - the so-called seven-day reverse repurchase rate - that is to replace the existing BI rate (which fails to influence market liquidity effectively).

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  • Bank Indonesia Adopts New Reference Rate: 7-day Reverse Repurchase Rate

    Bank Indonesia Adopts New Reference Rate: 7-day Reverse Repurchase Rate

    The central bank of Indonesia (Bank Indonesia) announced on Friday (15/04) it will adopt a new monetary tool per 19 August 2016 that is to replace the existing BI rate which is considered too inefficient to influence market liquidity as it is not directly tied to Indonesia's money markets. The seven-day reverse repurchase rate (reverse repo), which stood at 5.50 percent in the central bank's last auction, is to become the nation's new benchmark. Bank Indonesia Governor Agus Martowardojo, who communicated through a teleconference from Washington DC, emphasized that the central bank will not change its monetary stance.

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  • Few IPOs & Rights Issues: Fundraising in Indonesia's Capital Markets Low

    Few IPOs & Rights Issues: Fundraising in Indonesia's Capital Markets Low

    Fundraising in Indonesia's capital markets touched a multi-year low in the first quarter of 2016. Based on data from Bloomberg, only IDR 142.1 billion (approx. USD $10.8 million) was raised through rights issues and initial public offerings (IPOs) on the Indonesia Stock Exchange in Q1-2016, the lowest figure in the past seven years. Analysts expect fundraising in the capital markets of Indonesia to improve from the second quarter of 2016 onward due to expected accelerating economic growth and Bank Indonesia's lower interest rate environment.

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  • Credit Growth Bank Mandiri to Improve after Indonesia's Rate Cut

    Credit Growth Bank Mandiri to Improve after Indonesia's Rate Cut

    Bank Indonesia's decision to cut Indonesia's benchmark interest rate (BI rate) gradually from 7.50 percent at the year-start to 6.75 percent in March should lead to rising credit growth in Indonesia as borrowing costs have become less expensive. Bank Mandiri, Indonesia’s largest financial institution by assets, should see its financial performance improve due to the looser monetary policy. For Trimegah Securities the new context was reason to revise its forecast for net profit and net interest income of Bank Mandiri, a state-controlled entity that is listed on the Indonesia Stock Exchange (the central government owns a 60 percent stake).

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  • Bank Indonesia Cuts Key Interest Rate Again by 0.25%

    Bank Indonesia Cuts Key Interest Rate Again by 0.25%

    In line with expectation, the central bank of Indonesia (Bank Indonesia) cut its benchmark interest rate (BI rate) by 25 basis points to 6.75 percent on Thursday (17/03) at its two-day policy meeting. It is the third straight month of monetary easing in Southeast Asia's largest economy. In the preceding two months the lender of last resort had also cut borrowing costs by 0.25 percent, each month. Furthermore, the deposit and lending facility rates were also cut by 25 basis points to 4.75 percent and 7.25 percent, respectively (effective per 18 March 2016).

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  • Indonesia's BI Rate Cut Not Enough to Boost Household Consumption?

    Indonesia's BI Rate Cut Not Enough to Boost Household Consumption

    The decision of Indonesia's central bank (Bank Indonesia), last week, to cut its key interest rate (BI rate) by 0.25 percent to 7.00 percent and to cut the reserve-requirement ratio for commercial banks' rupiah deposits by 1 percent to 6.5 percent is a decision that should boost household consumption in Indonesia in 2016, improve people's purchasing power, give rise to a stronger automotive and property sector, and boost liquidity at local banks (hence providing room for an acceleration of credit growth in Southeast Asia's largest economy).

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