The latest survey of Indonesia’s central bank showed that consumer confidence fell slightly in November 2014 amid concern that the recent subsidized fuel price hike will lead to decreased business activity as well as reduced job availability in the next six months in Southeast Asia’s largest economy. Bank Indonesia’s consumer confidence index fell to 120.1 points from 120.6 points in October. The institution interviewed 4,600 households in 18 major Indonesian cities for this survey.

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Indonesia’s Central Statistics Agency (BPS) announced on Monday (01/12) that the country’s inflation figure accelerated to 6.23 percent year-on-year (y/y) in November 2014 (from 6.23 percent y/y in the previous month) due to the impact of higher subsidized fuel prices implemented by the Indonesian government. On 18 November, prices for subsidized fuels (low-octane gasoline and diesel) were raised by more than 30 percent in a bid to reallocate public spending from fuel consumption to productive long-term development.

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According to the central bank of Indonesia, inflation may reach around 8 percent (year-on-year) by the end of 2014 as a result of the higher subsidized fuel prices. In the early hours of Tuesday (18/11), subsidized fuel prices (gasoline and diesel) were raised by more than 30 percent in an attempt to reallocate government funds to more productive sectors as well as to curb the country’s wide current account deficit. Peaks in Indonesia’s inflation usually correlate with administered price adjustments.

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International credit rating agency Moody's Investors Service is positive about the subsidized fuel price hike that was conducted by the government of Indonesia on Monday (17/11) as it shows commitment of the government to implement reforms that support the strengthening of the economy, such as curbing Indonesia’s fiscal and current account deficits. Moody’s estimates that these developments are positive for the country’s sovereign rating (now at Baa3/stable) as well as for state-owned energy firm Pertamina (Baa3/stable).

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Main news headlines in Indonesia still cover the higher subsidized fuel prices implemented starting from the early hours of Tuesday (18/11). The previous evening, Indonesian President Joko Widodo had announced that prices of subsidized gasoline and diesel were to be raised by over 30 percent, immediately leading to long queues at local gas stations as well as public outcry as people’s purchasing power will diminish. Analysts and economists, however, agree that this move is correct and can lead to structurally higher GDP growth.

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The central bank of Indonesia decided to raise its key interest rate (BI rate) by 25 basis points from 7.50 percent to 7.75 percent on Tuesday (18/11) in a response to the subsidized fuel price hike. One day earlier, Indonesian President Joko Widodo had announced that prices of subsidized gasoline and diesel were to be raised by more than 30 percent starting from midnight in an effort to create more fiscal space for economic and social development. This move is expected to result in accelerated inflation in Southeast Asia’s largest economy.

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Indonesian President Joko Widodo announced yesterday evening (17/11) that prices of subsidized fuels will be raised by over 30 percent starting from midnight in an effort to reduce state expenses on non-productive matters. Low-octane gasoline (premium) will now cost IDR 8,500 (USD $0.70) per liter, while diesel now costs IDR 7,500 (USD $0.62) per liter. This sudden announcement immediately led to long queues at local gas stations as people still had three hours to enjoy cheaper fuel rates.

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Global rating agency Fitch Ratings affirmed Indonesia’s Sovereign Credit Rating at BBB-/stable outlook (investment grade status) on Thursday (13/11). This rating affirmation by the credit rating agency can be regarded as international recognition of prudent fiscal policy in Southeast Asia’s largest economy amid global uncertain times. Policy responses pursued by both the government and central bank of Indonesia have been well received by Fitch Ratings and managed to safeguard economic stability.

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The central bank of Indonesia (Bank Indonesia) announced today (after the Board of Governors’ meeting) that it keeps the benchmark interest rate (BI rate) at 7.50 percent. The lending facility rate and the deposit rate are maintained at 7.50 percent and 5.75 percent, respectively. Agus Martowardojo, Governor of Bank Indonesia, said that interest rates were maintained as the country’s current account deficit narrowed to 3.07 percent of gross domestic product (GDP) in the third quarter of 2014.

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The central bank of Indonesia is expected to keep its key interest rate (BI rate) at 7.50 percent at the next Board of Governors’ meeting (scheduled for Thursday 13 November 2014) in anticipation of accelerated inflation triggered by higher prices of subsidized fuels. The Indonesian government plans to raise prices of subsidized gasoline and diesel before the end of the month in an attempt to curb the country’s wide current account deficit and reallocate government funds to more structural or productive activities than fuel consumption.

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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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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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Bank Indonesia, the central bank of Indonesia, decided to maintain its benchmark interest rate, the BI 7-day (Reverse) Repo Rate (BI-7 day RR Rate), at 4.75 percent at the February 2017 policy meeting as Indonesia's inflation rate is expected to rise amid growing domestic demand and administered price adjustments, while the central bank also tries to mitigate the impact of looming normalization of US interest rates (expected later this year). Meanwhile, Bank Indonesia kept its deposit facility and lending facility rates at 4.00 percent and 5.50 percent, respectively.

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Bank Indonesia, the central bank of Indonesia, announced on Friday (10/02) that Indonesia's balance of payments surplus reached USD $4.5 billion in the fourth quarter of 2016 as the capital and financial accounts' surplus managed to (more than) compensate for the USD $1.8 billion current account deficit (or 0.8 percent of the country's gross domestic product/GDP) in the same quarter. Regarding full-year 2016, Indonesia posted a USD $12.1 billion surplus in its balance of payments, while its current account deficit was equivalent to 1.8 percent of GDP.

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The central bank of Indonesia (Bank Indonesia) decided to leave its interest rate environment unchanged at the January 2017 policy meeting on Thursday (19/01). The benchmark seven-day reverse repurchase rate (BI 7-day RR Rate) was kept at 4.75 percent, while the Deposit Facility and Lending Facility rates were maintained at 4.00 percent and 5.50 percent, respectively. The decisions of Bank Indonesia are in line with analysts' forecasts. Due to risks of capital outflows Indonesia's central bank had few room to ease monetary policy.

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Stock markets in Asia are mixed, yet tepid on Friday (16/12) after the US Federal Reserve raised its interest rate regime for the second time in a decade on Wednesday (14/12). Although the Fed's move was widely anticipated (and therefore already "priced in" to a high degree) it still resulted in some capital outflows from Asia's stock markets on Thursday (13/12). Japan, as usual, is the notable exception as US dollar strength (or yen weakness) makes Japan's export-oriented stocks more attractive.

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Bank Indonesia, the central bank of Indonesia, kept its benchmark interest rate unchanged at the December 2016 policy meeting, nearly a day after the US Federal Reserve decided to raise its key Fed Funds Rate by 25 basis points to the range 0.50 - 0.75 percent. Moves of both central banks were expected. Monetary tightening in the USA triggers capital outflows from emerging markets (the Indonesian rupiah depreciated around 0.70 percent against the US dollar on Thursday). Therefore, Bank Indonesia had little room to seek monetary easing.

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The Bank of Indonesia recently resorted to a sudden cut in interest rate (by 25 bps to 4.75 percent) at its 20th October 2016 meeting. This followed a 25 bps reduction in September and thus this is the sixth time this year that the Indonesian central bank has elected to loosen monetary policy.

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In line with expectations Indonesia's central bank (Bank Indonesia) kept its benchmark reference rate - the BI 7-Day (Reverse) Repo Rate - at 4.75 percent at Thursday's policy meeting (17/11). This decision was made amid the high degree of uncertainty in global financial markets (triggered by the 2016 US presidential election) and stable domestic conditions (low inflation and an improving current account deficit). The high degree of volatility does cause major pressures on the rupiah and therefore Bank Indonesia will continue to stabilize exchange rates through intervention in markets.

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Bank Indonesia (BI) is the central bank of the Republic of Indonesia, and was known as "De Javasche bank" or "The Java Bank" in the colonial period.  Bank Indonesia was founded on 1 July 1953 from the nationalization of De Javasche Bank. As an independent state institution, Bank Indonesia is fully autonomous in formulating and implementing each of its assumed tasks and most policy goals tend to center around the ability to stabilize prices in the economy.

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