Interest Rate in Indonesia
Indonesia - Interest Rate
Bank Indonesia hikes rates in November
At its 14–15 November monetary policy meeting, Bank Indonesia (BI) surprised markets by increasing the seven-day reverse repo rate from 5.75% to 6.00%, marking the sixth rate hike so far this year. In addition, the Bank raised the deposit facility rate and lending facility rate to 5.25% and 6.75%, respectively.
The Bank’s decision to tighten its stance came after a larger-than-expected trade deficit in October and a further widening of the current account deficit in the third quarter on surging imports. Moreover, although the rupiah has gained ground so far in November, it is still down notably since the start of the year, and the recovery could be short-lived given the likelihood of further rate hikes by the U.S. Federal Reserve and Indonesia’s weak external position. By tightening monetary policy, the Bank hoped to temper the current account deficit and bolster the currency.
Bank Indonesia did not provide any explicit forward guidance in its communiqué. However, with the U.S. Federal Reserve set to raise interest rates several times over the next 12 months, Bank Indonesia will likely further tighten monetary policy going forward to protect the currency.
The next monetary policy meeting will be held on 19–20 December.
Indonesia Interest Rate Forecast
Met the why particular Consensus Forecast panelists expect the seven-day reverse repo rate to end 2019 at 6.29% and 2020 at 6.00%.
Indonesia - Interest Rate Data
|Policy Interest Rate (%)||7.50||7.75||7.50||4.75||4.25|
5 years of economic forecasts for more than 30 economic indicators.
Indonesia Interest Rate Chart
Source: Bank Indonesia.
|Bond Yield||8.07||-0.05 %||Dec 14|
|Exchange Rate||14,585||0.05 %||Dec 14|
|Stock Market||6,170||-0.32 %||Dec 14|
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December 17, 2018
According to Statistics Indonesia, the country recorded a trade deficit of USD 2.0 billion in November, far larger than markets had expected and contrasting the USD 0.2 billion surplus registered in the same month last year.
December 11, 2018
In October, retail sales grew 2.9% over the same month last year, down from September’s 4.8% expansion and below the Bank’s initial estimate of 3.9%.
December 3, 2018
Consumer prices increased 0.27% in November from the previous month, almost matching October’s 0.28% increase.
December 3, 2018
Conditions in Indonesia’s manufacturing sector improved at a slower pace in November, according to the Purchasing Managers’ Index (PMI) released by IHS Markit and Nikkei, with the PMI decreasing from 50.5 in October to 50.4 in November—the third consecutive monthly decline.
November 15, 2018
According to Statistics Indonesia, the country recorded a trade deficit of USD 1.8 billion in October, larger than markets had expected and contrasting the USD 1.0 billion surplus registered in the same month last year.