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Today's Headlines BI Rate

  • Indonesia’s Economic Growth to Slip below 5% Mark in 2015?

    Indonesia’s Economic Growth to Slip below 5% Mark in 2015?

    Several international institutions revised down their outlook for economic growth of Indonesia in 2015 as foreign investors have been somewhat disappointed with the performance of the new Indonesian government, while the global economic picture remains far from rosy. Goldman Sachs, JPMorgan Chase, Credit Suisse and Nomura Holdings have all slashed Indonesia’s economic growth forecast this year to below the five percent (year-on-year) mark. Last year Indonesia’s economic growth touched a five-year low of 5.02 percent (y/y).

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  • Indonesia’s May Car Sales Decline 18% on Weak Consumer Demand

    Indonesia’s May Car Sales Decline 18% on Weak Consumer Demand

    Car sales in Indonesia have declined 17 percent to 443,328 units in the first five months of 2015 according to the latest data from the Indonesian Automotive Manufacturers Association (Gaikindo), hence providing further confirmation that consumer demand has continued to fall amid the country’s slowing economic growth, depreciating rupiah and accelerating inflation. Car sales are one of the key indicators to measure people’s purchasing power as well as the general state of the economy.

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  • Bank Indonesia Revises Down Economic Growth Outlook to 5.1%

    Bank Indonesia Revises Down Economic Growth Outlook to 5.1%

    The central bank of Indonesia (Bank Indonesia) revised down its economic growth outlook for Indonesia in 2015. In a meeting with the House of Representatives’ Budget Committee, Bank Indonesia Governor Agus Martowardojo said that Indonesia’s GDP growth is expected to reach 5.1 percent (y/y) this year. Previously, the central bank projected economic growth in the range of 5.4 to 5.8 percent (y/y). However, after seeing weak growth in the first quarter (4.71 percent y/y), projections had to be revised.

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  • Indonesia Investments' Newsletter of 24 May 2015 Released

    On 24 May 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 matters such as Bank Indonesia’s interest rate environment, revised requirements for the purchase of property, gender equality, consumer confidence, the IPO of PP Properti, luwak coffee, and more.

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  • Indonesian Stocks Up, Rupiah Weakens: Focus on Fed’s FOMC Minutes

    Indonesian stocks continued to rise one day after the country’s central bank (Bank Indonesia) announced to leave the interest rate policy unchanged and, instead, choosing to loosen its macro-prudential policy by revising the LDR-RR regulation, LTV policy for mortgage loans and down payments on automotive loans, hence increasing liquidity and boosting credit growth in the banking sector. Indonesia's rupiah, however, depreciated sharply after the market opened on Wednesday (20/05) due to the strong US dollar.

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  • Bank Indonesia Leaves Tight Monetary Policy, Interest Rates Unchanged

    Bank Indonesia Leaves Tight Monetary Policy, Interest Rates Unchanged

    Indonesia's central bank (Bank Indonesia) showed that it is committed to its relatively tight monetary stance as it left interest rates unchanged at its May Board of Governor’s Meeting. Despite pressures from the government and business players to cut interest rates (which would boost economic growth), Bank Indonesia maintained its key BI rate at 7.50 percent, the overnight deposit facility at 5.50 percent and the lending facility rate at 8.00 percent. In the first quarter of 2015 Indonesia’s economic growth had slowed to a disappointing 4.71 percent (y/y).

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  • Rupiah Down against US Dollar, Markets Wait for Bank Indonesia Meeting

    Indonesia’s rupiah continued to weaken on Monday’s trading day (18/05). The Indonesian rupiah had depreciated 0.22 percent to IDR 13,113 per US dollar by 12:08 pm based on the Bloomberg Dollar Index as market participants are waiting for results of the central bank’s Board of Governor’s Meeting, scheduled for Tuesday (19/05). At this meeting Indonesia’s central bank (Bank Indonesia) will discuss and determine its stance on the country’s interest rate environment. Currently, the key rate (BI rate) is set relatively high at 7.50 percent.

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  • Indonesia Investments' Newsletter of 17 May 2015 Released

    Indonesia Investments' Newsletter of 17 May 2015 Released

    On 17 May 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 matters such as updates on Indonesia’s current account balance and trade balance, Indonesia’s interest rate environment, human capital development, the forest moratorium, foreign ownership of property, and more.

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  • Dilemma Bank Indonesia: To Cut Interest Rates or Not?

    Dilemma Bank Indonesia: To Cut Interest Rates or Not?

    The central bank of Indonesia (Bank Indonesia) is currently dealing with a dilemma. On the one hand, its relatively high interest rate environment (with the benchmark BI rate at 7.50 percent) is partly responsible for the country’s slowing economic growth as credit expansion is curtailed and economic activity declines. On the other hand, Bank Indonesia’s high BI rate is needed to safeguard Indonesia’s financial stability as inflation is still above the central bank’s target, the current account deficit nearly unsustainable, and capital outflows loom.

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  • What is Next for the Indonesian Economy in 2015?

    What is Next for the Indonesian Economy in 2015?

    After seeing the disappointing GDP growth figure of 4.71 percent (y/y) in the first quarter of 2015, investors have become concerned about Indonesia’s economic growth in the remainder of the year. The poor Q1-2015 GDP growth was caused by the country’s weak export performance (due to the sluggish global economy and low commodity prices), Indonesia’s high interest rate environment (curbing people’s purchasing power and business expansion of local companies), and sluggish government spending.

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Latest Columns BI Rate

  • Analysis: Bank Indonesia Holds Policy Rate at 4.25% in December

    Analysis: Bank Indonesia Holds Policy Rate at 4.25% in December

    At the monthly policy meeting on 13-14 December 2017, Bank Indonesia decided to hold the benchmark BI 7-day Reverse Repo Rate at 4.25 percent, while it maintained the deposit facility and lending facility rates at 3.50 percent and 5.00 percent, respectively, effective per 15 December 2017.

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  • Monetary Policy Indonesia: Central Bank Cut Key Interest Rate Again

    Monetary Policy Indonesia: Central Bank Cut Key Interest Rate Again

    The central bank of Indonesia (Bank Indonesia) made another surprise move by cutting its benchmark BI 7-day Reverse Repo Rate 25 basis points (bps) from 4.50 percent to 4.25 percent at the September 2017 policy meeting. Meanwhile, Bank Indonesia also lowered the deposit and lending facility rates by 25 bps to 3.50 percent and 5.00 percent, respectively, effective per 25th September.

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  • Bank Indonesia Cut Policy Rate in Support of Economic Recovery

    Bank Indonesia Cut Policy Rate in Support of Economic Recovery

    For the first time since October 2016, the central bank of Indonesia (Bank Indonesia) altered its benchmark BI 7-day (Reverse) Repo Rate. After a nine-month hiatus the lender of last resort resumed monetary easing through cutting the benchmark by 25 basis points to 4.50 percent at the August 2017 policy meeting. Meanwhile, while the deposit and lending facility rates were also cut by 25 bps to 3.75 percent and 5.25 percent, respectively, effective 23rd August 2017.

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  • Bank Indonesia Leaves Key Rate Unchanged at June Policy Meeting

    Bank Indonesia Leaves Key Rate Unchanged at June Policy Meeting

    The central bank of Indonesia (Bank Indonesia) decided to leave its monetary policy unchanged at the two-day policy meeting in June 2017 that was concluded on Thursday (15/06). As widely expected it kept the benchmark 7-day reverse repurchase rate at 4.75 percent, as well as the deposit facility and lending facility at 4.00 percent and 5.50 percent, respectively. These existing levels are regarded to keep financial markets and the economy stable.

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  • Bank Indonesia Keeps Key Interest Rate at 4.75% in May 2017, Analysis

    Bank Indonesia Keeps Key Interest Rate at 4.75% in May 2017, Analysis

    The central bank of Indonesia (Bank Indonesia) maintained its benchmark interest rate - the 7-day reverse repurchase rate - at 4.75 percent at the policy meeting on 17-18 May 2017, a decision that is in line with analysts' forecasts. Bank Indonesia said the decision is consistent with its efforts to maintain macroeconomic and financial system stability "by driving the domestic economic recovery process", while continue to monitor external threats stemming from US policy directions and geopolitical conditions, specifically in the Korea Peninsula, as well as domestic threats stemming from inflationary pressures and ongoing consolidation in the banking and corporate sectors.

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  • Consumer Price Index Indonesia: Low Inflation Expected in April

    Consumer Price Index Indonesia: Low Inflation Expected in April

    It is highly unlikely to see the continuation of deflation in April. Last month (March 2017) Indonesia recorded 0.02 percent of deflation, primarily on the back of easing food prices amid the big harvest season. This harvest season will continue into April and therefore we expect few (to none) inflationary pressures stemming from food products. However, administered price adjustments (specifically another round of higher electricity tariffs in March) will impact of April's inflation figure, while consumer prices may also start to feel the impact of the approaching Ramadan month.

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  • Central Bank of Indonesia Leaves Interest Rates Unchanged in April

    Central Bank of Indonesia Leaves Interest Rates Unchanged in April

    The central bank of Indonesia (Bank Indonesia) kept its benchmark interest rate (seven-day reverse repo rate) at 4.75 percent at the April policy meeting (19-20 April 2017), while its deposit facility rate and lending facility rate stayed at 4.00 percent and 5.50 percent, respectively. Bank Indonesia considers the current interest rate environment appropriate to face global uncertainties as well as rising inflationary pressures at home.

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  • Bank Indonesia May Keep Key Rate at 4.75% throughout 2017

    Bank Indonesia May Keep Key Rate at 4.75% throughout 2017

    Bank Indonesia, the central bank of Indonesia, is expected to maintain its benchmark interest rate (the seven-day reverse repurchase rate, or reverse repo) at 4.75 percent in the remainder of 2017. Priasto Aji, economist at the Asian Development Bank (ADB), says Bank Indonesia may not need to adjust its key interest rate at all this year even though there is looming further monetary tightening in the USA.

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  • Bank Indonesia Keeps Key Interest Rate at 4.75% in March 2017

    Bank Indonesia Keeps Key Interest Rate at 4.75% in March 2017

    The central bank of Indonesia (Bank Indonesia) left its interest rate policy unchanged at the March 2017 policy meeting. This decision was in line with expectations especially after Bank Indonesia officials had stated that they see few room for monetary easing in the foreseeable future considering the US Federal Reserve is likely to raise its key rate several times this year (which could encourage capital outflows from Indonesia), while inflationary pressures in Indonesia are rising.

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