Bank Indonesia lowered its 7-day reverse repo rate by 25bps to 5.75 percent during its July meeting, the first interest rate cut since September 2017, in an attempt to support growth amid low inflation expectations. The overnight deposit and lending facilities were also trimmed by the same amount to 5.00 percent and 6.50 percent, respectively. Interest Rate in Indonesia averaged 7.04 percent from 2005 until 2019, reaching an all time high of 12.75 percent in December of 2005 and a record low of 4.25 percent in September of 2017.

Interest Rate in Indonesia is expected to be 5.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Indonesia to stand at 5.00 in 12 months time. In the long-term, the Indonesia Interest Rate is projected to trend around 5.50 percent in 2020, according to our econometric models.

Indonesia Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-04-25 07:30 AM Interest Rate Decision 6% 6% 6% 6%
2019-05-16 07:30 AM Interest Rate Decision 6% 6% 6% 6%
2019-06-20 07:30 AM Interest Rate Decision 6% 6% 6% 6%
2019-07-18 07:20 AM Interest Rate Decision 5.75% 6% 5.75% 5.75%
2019-08-22 07:30 AM Interest Rate Decision 5.75% 5.75%
2019-09-19 07:30 AM Interest Rate Decision
2019-10-24 07:30 AM Interest Rate Decision



Indonesia Cuts Rates for 1st Time in Almost 2 Years

Bank Indonesia lowered its 7-day reverse repo rate by 25bps to 5.75 percent during its July meeting, the first interest rate cut since September 2017, in an attempt to support growth amid low inflation expectations. The overnight deposit and lending facilities were also trimmed by the same amount to 5.00 percent and 6.50 percent, respectively.

Excerpts from the Bank Indonesia press release:

Bank Indonesia is maintaining an accommodative macroprudential policy stance to encourage bank lending and expand economic financing. In addition, Bank Indonesia constantly strengthens payment system policy and financial market deepening to support economic growth. Moving forward, Bank Indonesia perceives adequate space for accommodative monetary policy in line with low inflation expectations and the need to further stimulate economic growth.

Ongoing trade tensions continue to pressure world trade volume and undermine global economic growth. Flatter growth is predicted in the United States as exports decline due to simmering trade tensions, the fading effect of fiscal stimuli and restrained economic confidence. Growth has also slowed in Europe as a result of sluggish exports coupled with the ongoing structural issue of an aging population, which is undermining domestic demand. Declining exports and weaker domestic demand are also plaguing the economies of China and India. Global economic moderation, in turn, has amplified downside pressures on commodity prices, including oil. Several central banks in advanced and developing economies have responded to the inauspicious economic dynamics by relaxing monetary policy, including the US Federal Reserve, which is expected to lower the federal funds rate (FFR).

At home, Indonesia has maintained relatively stable economic growth in the second quarter of 2019 compared with conditions in the previous period. Private consumption remains solid, backed by maintained consumer confidence. Furthermore, building investment continues to expand at a stable pace. Meanwhile, exports from Indonesia are expected to contract on subdued global demand and lower commodity prices stemming from the ongoing trade dispute, although steel exports increased in June 2019. The impact of simmering trade tensions on lower exports has been felt in a number of countries. In Indonesia, the export contraction has impeded imports and undermined nonbuilding investment. Moving forward, efforts to stimulate domestic demand, including investment, are required in order to mitigate the adverse impact of global economic moderation. In general, Bank Indonesia projects national economic growth in Indonesia below the midpoint of the 5.0-5.4% range in 2019. In addition, Bank Indonesia will institute a policy mix in cooperation with the Government and other relevant authorities in order to build economic growth momentum.

Low and stable inflation was maintained in June 2019. Consumer Price Index (CPI) inflation stood at 0.55% (mtm) or 3.28% (yoy) in June 2019, down slightly on the previous period at 0.68% (mtm) or 3.32% (yoy). Furthermore, core inflation was also kept under control in line with policy consistency by Bank Indonesia to anchor rational inflation expectations, including maintaining rupiah exchange rates in line with the currency's fundamental value. Administered prices (AP) recorded deflation in the reporting period as airfares were readjusted after the peak festive period. Inflationary pressures on volatile foods were controlled as the seasonal impact of Ramadan and Eid-ul-Fitr began to fade. Bank Indonesia constantly strengthens policy coordination with the central and local governments to ensure low and stable inflation, including in anticipation of an earlier and protracted dry season forecasted this year. Bank Indonesia projects inflation in 2019 below the midpoint of the target corridor, namely 3.5%±1%.


Bank Indonesia | Joana Ferreira | joana.ferreira@tradingeconomics.com
7/18/2019 10:22:15 AM



Indonesia Money Last Previous Highest Lowest Unit
Interest Rate 5.75 6.00 12.75 4.25 percent [+]
Money Supply M0 675767.84 590357.64 675767.84 2983.00 IDR Billion [+]
Money Supply M1 1508120.30 1451646.30 1508120.30 317.90 IDR Billion [+]
Interbank Rate 6.51 6.64 57.79 4.19 percent [+]
Money Supply M2 5861305.70 5744048.70 5861305.70 5156.00 IDR Billion [+]
Foreign Exchange Reserves 123823.00 120300.00 131979.64 27404.30 USD Million [+]
Loans to Private Sector 4739282.00 4672630.00 4739282.00 286724.00 IDR Billion [+]
Deposit Interest Rate 5.00 5.25 56.00 3.00 percent [+]
Lending Rate 6.50 6.75 15.75 5.00 percent [+]
Loan Growth 11.05 11.05 90.50 -59.90 percent [+]
Cash Reserve Ratio 6.50 6.50 8.00 5.00 percent [+]


Indonesia Interest Rate

In Indonesia the interest rate decisions are taken by The Central Bank of Republic of Indonesia. In April of 2016, policymakers announced the replacement of the official discount interest rate with new 7-day reverse repurchase rate in August 2016. This is the rate at which central banks lend or discount eligible paper for deposit money banks, typically shown on an end-of-period basis. This page provides - Indonesia Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Indonesia Interest Rate - actual data, historical chart and calendar of releases - was last updated on July of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
5.75 6.00 12.75 4.25 2005 - 2019 percent Daily




Country Last Previous
Argentina 58.72 Jul/19
Turkey 24.00 Jun/19
Mexico 8.25 Jul/19
Russia 7.50 Jun/19
Brazil 6.50 Jun/19
South Africa 6.50 Jul/19
India 5.75 Jul/19
Indonesia 5.75 Jul/19
China 4.35 Jun/19
Saudi Arabia 3.00 Jun/19
United States 2.50 Jun/19
Canada 1.75 Jul/19
Singapore 1.67 Jun/19
South Korea 1.50 Jul/19
Australia 1.00 Jul/19
United Kingdom 0.75 Jun/19
Euro Area 0.00 Jun/19
France 0.00 Jun/19
Germany 0.00 Jun/19
Italy 0.00 Jun/19
Netherlands 0.00 Jun/19
Spain 0.00 Jun/19
Japan -0.10 Jun/19
Switzerland -0.75 Jun/19


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