Interest Rate in Indonesia
Indonesia - Interest Rate
BI leaves rates unchanged in December
At its 19–20 December monetary policy meeting, Bank Indonesia (BI) left the seven-day reverse repo rate at 6.00%, following a surprise rate hike in the prior month. In addition, the Bank left the deposit facility rate and lending facility rate at 5.25% and 6.75%, respectively.
The Bank’s decision to stay put came after 175 basis points of rate rises earlier in 2018, chiefly to support the rupiah and maintain the attractiveness of domestic financial markets. Following such significant tightening already this year, given that the currency has strengthened somewhat from the lows reached in October, and that inflation is subdued, the Bank felt that a further hike wasn’t warranted in December.
Bank Indonesia did not provide any explicit forward guidance in its communiqué, although future monetary developments are likely to be driven largely by external factors, given contained domestic cost pressures and solid GDP growth. With the U.S. Federal Reserve set to raise interest rates further in 2019, Bank Indonesia is likely to follow suit to protect the currency. In 2020, the Fed is seen loosening its stance somewhat, which should enable Bank Indonesia to cut rates to support the economy.
The next monetary policy meeting will be held on 16–17 January.
Indonesia Interest Rate Forecast
FocusEconomics Consensus Forecast panelists expect the seven-day reverse repo rate to end 2019 at 6.27% and 2020 at 5.98%.
Indonesia - Interest Rate Data
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
| Policy Interest Rate (%) | 7.50 | 7.75 | 7.50 | 4.75 | 4.25 |
Indonesia Interest Rate Chart
Source: Bank Indonesia.
Indonesia Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 7.98 | -0.05 % | Jan 14 |
| Exchange Rate | 14,124 | 0.05 % | Jan 14 |
| Stock Market | 6,336 | -0.32 % | Jan 14 |
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Economic News
Indonesia: Indonesia records third consecutive monthly trade deficit in December, exports contract
January 15, 2019
According to Statistics Indonesia, the country recorded a trade deficit of USD 1.1 billion in December, marking the third consecutive month in which the deficit has been wider than market expectations.
Indonesia: Growth in retail sales picks up in November
January 10, 2019
In November, retail sales grew 3.4% over the same month last year, up from October’s 2.9% expansion and matching the Bank’s initial estimate.
Indonesia: Manufacturing PMI rises in December
January 2, 2019
Conditions in Indonesia’s manufacturing sector improved at a faster pace in December, according to the Purchasing Managers’ Index (PMI) released by IHS Markit and Nikkei, with the PMI increasing from 50.4 in November to 51.2 in December.
Indonesia: Inflation dips in December
January 2, 2019
Consumer prices increased 0.62% in December from the previous month, up from November’s 0.27% increase.
Indonesia: BI leaves rates unchanged in December
December 20, 2018
At its 19–20 December monetary policy meeting, Bank Indonesia (BI) left the seven-day reverse repo rate at 6.00%, following a surprise rate hike in the prior month.
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