Indonesia's foreign exchange reserves rose slightly last month. According to the lastest data from the central bank of Indonesia (Bank Indonesia), the country's foreign exchange assets inched up to USD $107.7 billion in April 2016 from USD $107.5 billion in the preceding month. Bank Indonesia stated that the increase came on the back of foreign exchange receipts obtained through the recent sale of central bank certificates (SBBI). These proceeds exceeded foreign exchange needed for foreign debt payments, hence causing rising reserve assets.

Read more ›

Local media in Indonesia report that the Indonesian government has a list of 6,000 names of Indonesians that are ready to repatriate their funds in order to take advantage of the tax incentive provided by the Tax Amnesty Bill. This controversial bill, which is currently being discussed by Indonesia's House of Representatives (DPR), makes it attractive for tax evaders to repatriate their undeclared wealth into Indonesia as they are offered tax incentives and protection from prosecution.

Read more ›

The central bank of Indonesia (Bank Indonesia) kept its key interest rate (BI rate) at 6.75 percent at the April policy meeting. This decision was in line with expectations. During the three policy meetings conducted in the January-March 2016 period Bank Indonesia had already cut its BI rate by a combined 75 basis points as inflation and the current account deficit are under control, while the Indonesian rupiah has been strengthening against the US dollar since the start of 2016. Last week, Bank Indonesia announced it will adopt the seven-day reverse repurchase rate (reverse repo) to replace the existing BI rate as the bank's key monetary tool.

Read more ›

Indonesia's foreign debt rose 3.7 percent (y/y) to USD $311.5 billion at end-February 2016, a higher growth pace compared to the 2.2 percent (y/y) recorded in the preceding month. The central bank of Indonesia (Bank Indonesia) informed that rising foreign debt was solely due to higher public sector foreign debt, while private sector foreign debt in fact eased. The Indonesian government took up long-term foreign debt to fund its ambitious infrastructure development programs. As a result, public sector external debt rose 9 percent to USD $146.9 billion in February, or 47.2 percent of Indonesia's total foreign debt.

Read more ›

The central bank of Indonesia (Bank Indonesia) plans to adopt a new tool of monetary policy that is to replace the existing benchmark interest rate (BI rate). On Friday (15/04), Bank Indonesia will announce and elaborate on the new policy. Earlier, Indonesia's central bank said it was studying the implementation of a seven-day reverse repurchase rate (reverse repo) as the nation's new benchmark that is to influence borrowing costs and market liquidity more effectively. The new policy would mean Bank Indonesia sells securities with an agreement to buy them back within a seven-day period.

Read more ›

The central bank of Indonesia (Bank Indonesia) announced that the nation's foreign exchange reserves rose to a total of USD $107.5 billion at the end of March 2016, up USD $3 billion from Indonesia's forex assets one month earlier. Growing reserves came on the back of foreign exchange receipts, primarily through the the issuance of government global sukuk (Islamic bonds) and Bank Indonesia's US dollar-denominated bills. These forex receipts outweighed the government's foreign debt obligations.

Read more ›

The banking sector of Indonesia is expected to rebound in 2016 due to the lower primary reserve requirement ratio for rupiah deposits (6.5 percent), lower cost of funds as well as operational costs, rising credit volume (due to the lower interest rate environment) and improving purchasing power. The banking sector is also expected to feel the positive impact of the stimulus packages unveiled by the Indonesian government aimed at strengthening domestic businesses and improve the investment climate. And lastly, banks are to benefit from the government's push for infrastructure development.

Read more ›

In the first three monthly policy meetings this year (January-March) the central bank of Indonesia (Bank Indonesia) cut borrowing costs by a total of 75 basis points. Indonesia's benchmark interest rate (BI rate) was cut from 7.50 percent at the year-start to 6.75 percent at Thursday's Board of Governors' meeting. The overnight deposit facility rate and lending facility rate were also cut by 75 basis points, each, in the first three months. The lower interest rate environment in Indonesia signals that the financial fundamentals are strong. This is partly reason behind strong inflows of foreign capital into Southeast Asia's largest economy.

Read more ›

The foreign exchange reserves of Indonesia rose USD $2.4 billion to USD $104.5 billion in February 2016 according to a statement of Indonesia's central bank (Bank Indonesia). The lender of last resort attributed this forex growth to foreign exchange receipts from the oil & gas sector, foreign debt withdrawals, and the sale of foreign-denominated bonds (SBBI). These receipts were more than enough to cover for the use of foreign exchange for public foreign debt payments.

Read more ›

Indonesia's consumer confidence regarding the country's macroeconomic conditions weakened in February 2016. Bank Indonesia's Consumer Confidence Index dropped 2.6 points to 110. The survey indicates that there are two reasons that explain this decline. Firstly, lower optimism about current economic conditions of Indonesia and, secondly, lower optimism regarding job availability over the next six months. Bank Indonesia's monthly survey is based on data provided by 4,600 households in 18 Indonesian cities across the archipelago.

Read more ›

Forecasts for Indonesia’s gross domestic product (GDP) growth in 2013 and beyond have been revised down by all institutions, including the Indonesian government and central bank as well as international organizations such as the World Bank and the International Monetary Fund (IMF). Initially, the country’s economic growth was expected to reach around 6.5 percent in 2013. However, most institutions have downgraded forecasts for the country’s economic growth to below the 6.0 percent mark.

Read more ›

Today (18/10), the Governor of Bank Indonesia and the Chairman of the Indonesian Financial Services Authority (OJK) signed an agreement concerning “cooperation and coordination to support task implementation at Bank Indonesia and OJK”. The agreement forms a basis for expediting and optimising coordination between both organisations in terms of their function, task and authority in light of the upcoming transfer of the banking regulation and supervision function from Bank Indonesia to OJK on 31 December 2013.

Read more ›

On 12 October 2013 Finance Minister and Central Bank Governors from Korea and Indonesia agreed to establish a bilateral KRW/IDR swap arrangement in the near future. The size of the swap arrangement is up to KRW 10.7 trillion/IDR 115 trillion (equivalent to USD $10 billion). The effective period of the facility will be three years, and could be extended by agreement by both sides. This Bilateral Currency Swap Arrangement (BCSA) aims to promote bilateral trade and further strengthen financial cooperation, an objective of mutual interest to both countries.

Read more ›

Although Indonesia's benchmark stock index (IHSG) started mixed on Wednesday (09/10), it gradually climbed as the trading day moved on. The country's benchmark interest rate (BI rate), which was kept at 7.25 percent by Bank Indonesia on Tuesday (08/10), continued to make a positive impact. However, negative market sentiments were brought on by the US shutdown as well as the downgrade of the IMF's outlook for world economic growth in 2013 and 2014. Lastly, the weakening IDR rupiah also implied negative market sentiments.

Read more ›

Bank Indonesia’s Board of Governors decided to hold the BI Rate at a level of 7.25 percent, with rates on the Lending Facility and Deposit Facility held respectively at 7.25 percent and 5.50 percent. Bank Indonesia will continue to monitor global and domestic developments and further synergise the monetary and macroprudential policy mix in order to ensure that inflationary pressures remain under control, that rupiah exchange rate stability is maintained according to its fundamentals and the current account deficit is reduced to a sustainable level.

Read more ›

After three months of high monthly inflation rates, Indonesia's inflation eased in September due to falling prices of food, transportation, communications and financial services after the Muslim celebrations of Idul Fitri, which always cause a spike in inflation, have passed. In September 2013, Indonesia posted deflation of 0.35 percent. It was the first time in 12 years that the country posted deflation in this month. The annual inflation rate eased to 8.40 percent from 8.79 percent in August 2013.

Read more ›

Inflationary pressures eased in September 2013 to a 0.35% rate of deflation (mtm), or 8.40% (yoy). The rate of deflation exceeded the projections contained within the Price Monitoring Survey conducted by Bank Indonesia and much lower than inflation expectations by some analysts. Abundant supply in the wake of horticultural harvests (shallots and chilli peppers), triggered a deep correction in food prices. In addition, sliding beef prices also exacerbated further deflationary pressures, with volatile foods recording deflation of 3.38% (mtm).

Read more ›

Investors are eagerly waiting for the release of Indonesia's September inflation rate. Indonesia has been hit by high inflation since the government decided to increase prices of subsidized fuels at the end of June. High inflation limits its people's purchasing power and as domestic consumption accounts for about 55 percent of Indonesia's economic growth, it thus impacts negatively on GDP growth, particularly after Bank Indonesia raised its benchmark interest rate (BI rate) from 5.75 to 7.25 percent between June and September.

Read more ›

Bank Indonesia amended its regulation concerning the Loan To Value (LTV) and Financing To Value (FTV) ratio for property credit and property-backed consumer loans. The LTV/FTV ratio is the ratio between the value of credit/financing that can be allocated by a bank and the corresponding value of collateral in the form of property when the loan is allocated. Property is real property that includes houses, vertical housing (apartments, flats, condominiums and penthouses), home offices and home stores.

Read more ›

Indonesia's central bank, Bank Indonesia, expects deflation of about 0.9 percent in September 2013. Statistics Indonesia, on the other hand, believes there will be limited inflation this month. Both institutions agree, however, on a forecast of at least 9 percent of inflation over full-year 2013. The bank's September forecast is based on a survey that was conducted in the second week of September. This survey showed that food commodities and government administered prices eased.

Read more ›