The shift comes at a timely moment, as Bank Indonesia pushes for lenders to pass through aggressive interest-rate cuts to households and businesses to support growth. It also brings the Southeast Asian country in line with a global move toward transaction-based benchmarks.
(Dec 29): Indonesia is set to phase out a key money-market benchmark this week, concluding a years-long transition to align with global standards.
Bank Indonesia will retire the Jakarta interbank offered rate and fully replace it with the Indonesian overnight index average, known as Indonia, on Jan 1, as it aims to improve transparency and deepen the domestic funding market. Local institutions have been using the alternative reference rate as part of the transition process since August 2018.
