MONETARY POLICY

REPORT
Quarter III 2022
 Foreword

The Board of Governors

PERRY WARJIYO
Governor

DESTRY DAMAYANTI
Senior Deputy Governor

DODY BUDI WALUYO

Deputy Governor

DONI PRIMANTO JOEWONO

Deputy Governor

JUDA AGUNG
Deputy Governor

AIDA S. BUDIMAN
Deputy Governor

i • Quarter III 2022

 Table of Content

Foreword i Executive Summary 1

The Board of Governors i 1. Global and Domestic Economic 2

Developments

Table of Content ii
2. Bank Indonesia Policy Response 5

• Quarter III 2022 ii

Executive Summary
Global economic is prone to moderation, accompanied by accelerating digitalisation to improve the efficiency of
intense inflationary pressures and global financial market economic transactions and support economic recovery.
uncertainty. At home, the national economic recovery
The BI Board of Governors agreed on 19th and 20th
remains intact. Indonesia's Balance of Payments (BOP)
October 2022 to raise the BI 7-Day Reverse Repo Rate
remains sound in line with persistently strong non-oil and
(BI7DRR) by 50bps to 4.75%, while also raising the Deposit
gas export performance. Rupiah stability has been
Facility (DF) and Lending Facility (LF) rates by 50bps to
maintained despite increasing global financial market
4.00% and 5.50% respectively. The decision to raise the
uncertainty and US dollar appreciation. Inflation is lower
policy rate was taken as a front-loaded, pre-emptive and
than initially projected. Ample liquidity in the banking
forward-looking measure to lower overshooting inflation
industry and economy remains. Policy rate hikes are
expectations and return core inflation to the 3.0%±1%
raising money market rates amid interest rate rigidity in
target corridor in the first half of 2023, while
the banking industry. The bank intermediation function
simultaneously strengthening exchange rate stabilisation
continues to improve and support the economic recovery.
policy in line with the rupiah's fundamental value in
Financial system resilience remains solid, particularly the
response to broad-based US dollar appreciation and
banking industry, in terms of capital and liquidity. Bank
elevated global financial market uncertainty amid strong
Indonesia is strengthening payment system policy and
and increasing domestic demand.

1 Triwulan I 2020
CHAPTER I

Global and Domestic

Economic Developments
Global economic is prone to moderation, accompanied various economies, including Indonesia. Currency
by intense inflationary pressures and global financial pressures are escalating with increasing global financial
market uncertainty. After improving in 2022, global market uncertainty, thus exacerbating investment
economic growth in 2023 is expected to decelerate portfolio outflows from EMEs, including Indonesia.
further than previously expected, with the risk of
At home, the national economic recovery remains intact.
recession in several countries. Economic growth has been
Third-quarter gains are projected for the domestic
revised down in several advanced economies, particularly
economy on the back of increasing non-building
the United States (US) and Europe, and also in China.
investment and private consumption, persistently solid
Global economic moderation stems from ongoing
exports and maintained public purchasing power despite
geopolitical tensions that have triggered economic, trade
higher inflation. Several early indicators in September
and investment fragmentation, and prompted more
2022 and the latest surveys conducted by Bank Indonesia,
aggressive tightening of monetary policy. The contagion
namely consumer confidence, retail sales and the
effect of global economic fragmentation is also expected
Manufacturing Purchasing Managers Index (PMI), confirm
to undermine emerging market economies (EME).
that the domestic economic recovery process remains
Meanwhile, intense inflationary pressures and high core
intact. Externally, solid export performance is expected to
inflation globally due to supply chain disruptions have
persist, specifically in terms of coal, crude palm oil (CPO)
spurred more aggressive monetary policy tightening. A
as well as iron and steel, in line with strong demand in key
higher for longer federal funds rate (FFR) is strengthening
trading partners and government policy to stimulate
the US dollar, thus inducing depreciatory pressures in
exports of CPO and its derivatives. Spatially, positive

• Quarter III 2022 2

export performance was supported by all regions,
especially Kalimantan and Sumatra. Furthermore, national
economic improvements were also reflected in the main
economic sectors, namely trade, mining and agriculture.
Consequently, economic growth in 2022 is projected with
a bias towards the upper bound of Bank Indonesia's 4.5-
5.3% projection. Meanwhile, strong economic growth is
still projected for 2023 on the back of solid domestic
demand given increasing mobility and the completion of
various national strategic projects despite deeper global
economic moderation.
Indonesia's Balance of Payments (BOP) remains sound in
line with persistently strong non-oil and gas export
performance. Similar to conditions in the previous period,
the current account is projected to maintain a surplus in
line with the USD14.9 billion trade surplus. Meanwhile,
pressures on foreign capital flows are increasing, primarily
in the form of portfolio investment, due to elevated
global financial market uncertainty. Portfolio investment
is expected to record a net outflow of USD2.1 billion in
the third quarter. The position of reserve assets in
Indonesia at the end of September 2022 stood at
USD130.8 billion, equivalent to 5.9 months of imports or
5.7 months of imports and servicing government external
debt, which is well above the 3-month international
adequacy standard. Despite global financial market
uncertainty, which is expected to remain high, BOP
performance in 2022 will be maintained with a positive
current account in the 0.4-1.2% of GDP range, coupled
with a sound capital and financial account that is
dominated by foreign direct investment (FDI). Strong BOP
performance is projected in 2023, supported by a solid
current account along with capital and financial account,
notwithstanding the persistent risk of uncertainty
blighting global financial markets.
Rupiah stability has been maintained despite increasing
global financial market uncertainty and US dollar
appreciation. The US Dollar (DXY) Index peaked at 114.76
on 28th September 2022 and stood at 112.98 on 19th
October 2022, increasing 18.10% (ytd) in 2022. As of 19th
October 2022, the rupiah depreciated 8.03% (ytd) on the
level recorded at the end of 2021, which is nevertheless
comparatively lower than the currency depreciation
experienced in other peer countries, such as India
(10.42%), Malaysia (11.75%) and Thailand (12.55%).
Depreciation is in line with the strong US dollar and
increasing global financial market uncertainty caused by
aggressive monetary policy tightening in several
jurisdictions, particularly the US, in response to
inflationary pressures and concerns stoked by global
economic moderation, despite the positive perception of
3 • Quarter III 2022
Indonesia's economic outlook. Moving forward, Bank
Indonesia will continue to monitor the supply of foreign
exchange and strengthen rupiah stabilisation policy in line
with market mechanisms and the currency's fundamental
value in order to support measures to manage inflation
and maintain macroeconomic stability.
Inflation is lower than initially projected. The Consumer
Price Index (CPI) in September 2022 stood at 5.95% (yoy),
up from 4.69% (yoy) the month earlier, after fuel prices
were adjusted. Inflation in September 2022 was lower
than previously projected because the impact of fuel price
hikes on volatile food and administered prices was
weaker than initially forecast. Volatile food (VF) inflation
of 9.02% (yoy) is in line with close policy coordination and
synergy through the TPIP-TPID inflation control teams and
National Movement for Food Inflation Control (GNPIP),
which aim to safeguard supply availability, orderly
distribution, price stability and effective communication.
The increase in administered prices (AP) inflation was also
lower than previously expected, namely 13.28% (yoy), in
line with lower adjustments to fuel prices and
transportation tariffs. Meanwhile, low core inflation was
maintained at 3.21% (yoy) given the weaker second-
round effect of fuel price adjustments, coupled with mild
inflationary pressures from the demand side.
Notwithstanding overshooting inflation expectations in
the Consensus Forecast, the Cost of Living Survey in the
second week of October projected lower inflation in
October than in September 2022. Based on such
developments, Bank Indonesia expects lower inflation in
2022 than previously projected, despite still exceeding the
upper limit of the 3.0%±1% target. Policy synergy
between the central/regional government and Bank
Indonesia will be strengthened to restore inflation to the
target corridor.
Ample liquidity in the banking industry and economy
remains. In September 2022, the ratio of liquid assets to
third-party funds remained high at 27.35%, thereby
supporting the banking industry's ability to disburse loans
amid ongoing liquidity policy normalisation by Bank
Indonesia through gradual increments in rupiah reserve
requirements (RR) and maintaining the RR incentive.
Liquidity conditions in the economy are loose, as reflected
by 13.5% (yoy) and 9.1% (yoy) growth of narrow money
(M1) and broad money (M2) aggregates respectively.
Meanwhile, implementing the Joint Decree between Bank
Indonesia and the Ministry of Finance, BI continues to
purchase SBN in the primary market to fund the national
economic recovery and finance the health and
humanitarian aspects of the Covid-19 pandemic, totalling
Rp138.08 trillion as of 19th October 2022. Ample liquidity Financial system resilience remains solid, particularly the
is also helping to drive the economic recovery. banking industry, in terms of capital and liquidity. The
Capital Adequacy Ratio (CAR) in the banking industry was
Policy rate hikes are raising money market rates amid
still high in August 2022 at 25.12%. Strong capital is
interest rate rigidity in the banking industry. In the
helping to minimise credit risk, as reflected by low NPL
markets, the IndONIA rate increased 102bps from the end
ratios of 2.88% (gross) and 0.79% (nett). Liquidity in the
of July 2022 to 3.82% on 19th October 2022 in line with
banking industry was maintained in September 2022,
the higher BI7DRR and strengthening the monetary
supported by deposit growth of 6.77% (yoy) despite
operations strategy of Bank Indonesia. Short-term SBN
moderating from 7.77% in August 2022 due to increasing
yields are up 114bps, coupled with relatively stable long-
private consumption and corporate capital expenditures
term SBN yields. Lending rates and funding costs in the
as well as the current preference to place funds in other
banking industry are experiencing rigidity in line with
financial assets, as indicated by the value of SBN holdings.
loose liquidity conditions that are prolonging the lag
BI simulations confirmed that bank resilience has been
effect of policy rate transmission.
maintained, yet the potential impact of several risk
The bank intermediation function continues to improve factors stemming from domestic macroeconomic
and support the economic recovery. Growth of conditions and global economic turmoil demand vigilance.
outstanding loans disbursed by the banking industry in
Bank Indonesia is strengthening payment system policy
September 2022 stood at 11.00% (yoy), boosted by all
and accelerating digitalisation to improve the efficiency
loan types and economic sectors. Intermediation in the
of economic transactions and support economic
sharia banking industry also continues to recover, with
recovery. Digital economic and financial transactions
growth accelerating to 19.0% (yoy) in September 2022.
continue to increase in line with greater public
On the supply side, a stronger intermediation function
acceptance and growing public preference towards online
was supported by lending standards that remain loose in
retail as well as the expansion and convenience of the
the banking industry given the improving appetite to
digital payment system and accelerating digital banking.
disburse loans, primarily to the manufacturing industry,
The value of electronic money transactions grew 35.79%
agricultural sector, trade and construction. On the
(yoy) in the third quarter of 2022, which is projected to
demand side, an ongoing corporate and household sector
increase by 32.27% (yoy) in 2022 to reach Rp404 trillion.
recovery is driving intermediation. Corporate sector
In addition, the value of digital banking transactions
performance is reflected by improving repayment
increased 29.47% (yoy) in the third quarter of 2022, which
capacity, sales and capital expenditures (CapEx),
is projected to increase by 30.19% (yoy) in 2022 to reach
particularly in the trade and mining sectors. Household
Rp53,144 trillion. Bank Indonesia continues to foster
performance is indicated by improving consumption and
payment system innovation, including ongoing
investment in line with consumer optimism. In terms of
preparations for the post-pilot implementation of QRIS
micro, small and medium enterprises, MSME loan growth
TTS (withdrawal, transfer, deposit), while expanding
was recorded at 17.13% (yoy) in September 2022,
cross-border QRIS arrangements. In terms of cash,
primarily supported by the micro segment. Bank
currency in circulation in the third quarter of 2022
Indonesia appreciates the contribution of the banking
increased 7.61% (yoy). Bank Indonesia continues to
industry in terms of accelerating the national economic
ensure the availability of quality rupiah currency fit for
recovery by increasing lending to the corporate sector
circulation throughout the territory of the Republic of
and maintaining accommodative lending rates. Based on
Indonesia, including the new 2022 series of
the latest developments and synergetic efforts by the
rupiah banknotes.
authorities, financial sector and corporate sector, credit
growth in 2022 is projected in the 9-11% (yoy) range.

• Quarter III 2022 4

CHAPTER II

Bank Indonesia Policy

Response
The BI Board of Governors agreed on 19th and 20th 1. Strengthening monetary operations by increasing
October 2022 to raise the BI 7-Day Reverse Repo Rate the interest rate structure in the money market in
(BI7DRR) by 50bps to 4.75%, while also raising the Deposit accordance with the higher BI 7-Day Reverse Repo
Facility (DF) and Lending Facility (LF) rates by 50bps to Rate (BI7DRR) to lower inflation expectations and
4.00% and 5.50% respectively. The decision to raise the return core inflation to the target.
policy rate was taken as a front-loaded, pre-emptive and
2. Strengthening rupiah stabilisation policy as part of
forward-looking measure to lower overshooting inflation
the measures to control inflation, primarily imported
expectations and return core inflation to the 3.0%±1%
inflation, through foreign exchange market
target corridor in the first half of 2023, while
intervention, including spot and DNDF transactions,
simultaneously strengthening exchange rate stabilisation
as well as buying/selling SBN in the secondary
policy in line with the rupiah's fundamental value in
market.
response to broad-based US dollar appreciation and
elevated global financial market uncertainty amid strong 3. Continue buying/selling SBN in the secondary
and increasing domestic demand. market to strengthen transmission of the BI7DRR by
increasing the attractiveness of SBN yields for
Bank Indonesia also continues to strengthen its policy mix
foreign portfolio investment inflows to strengthen
response to maintain stability and strengthen economic
exchange rate stabilisation measures.
recovery as follows:

5 • Quarter III 2022

4. Maintaining accommodative macroprudential policy
to revive bank lending to businesses by:
i. holding: (a) the countercyclical capital buffer
(CCyB) at 0%, (b) Macroprudential
Intermediation Ratio (MIR) in the 84-94% range,
and (c) Macroprudential Liquidity Buffer (MPLB)
at 6% with repo flexibility of 6% and sharia
MPLB at 4.5% with repo flexibility of 4.5%,
ii. maintaining looser Loan/Financing-to-Value
(LTV/FTV) ratios on property loans/financing to
a maximum of 100% on all property types
(landed houses, apartments and shop/office
house) for banks meeting specific NPL/NPF
criteria, to revive credit growth in the property
sector in line with risk management and
prudential principles, effective from 1st January
2023 to 31st December 2023, and
iii. maintaining looser down payment
requirements on automotive loans/financing at
0% for all types of new motor vehicle in order to
revive credit growth in the automotive sector,
while applying risk management and prudential
principles, effective from 1st January 2023 to
31st December 2023.
5. Maintaining prime lending rate (SBDK) transparency
policy in the banking industry with a focus on the
assessment of policy rate transmission to interest
rates on new loans in the banking industry.
6. Strengthening payment system policy through
digitalisation of the banking industry and non-bank
financial institutions by expanding the participation,
ecosystem and utilisation of BI-FAST, while
accelerating the adoption of National Open API
Payment Standards (SNAP) for banks and non-banks.
7. Strengthening international cooperation with other
central banks and financial authorities, promoting
trade and investment in priority sectors in synergy
with other relevant institutions as well as ensuring
the success of the six priority agendas in the Finance
Track of Indonesia's G20 Presidency, specifically at
the G20 Leaders' Summit in November 2022.
Policy coordination among the central government,
regional governments, and strategic partners within the
Central and Regional Inflation Control Teams (TPIP and
TPID) is constantly strengthened through the effective
implementation of National Movement for Food Inflation
Control (GNPIP) in various regions. Policy synergy
between Bank Indonesia and government fiscal policy, as
well as with the Financial System Stability Committee, is
also being strengthened to maintain macroeconomic and
financial system stability, while reviving lending to
businesses in priority sectors to stimulate economic
growth and exports, while increasing economic and
financial inclusion.
• Quarter III 2022 6
 Global economic is prone to moderation, accompanied by intense inflationary pressures and
global financial market uncertainty
Global GDP Growth Global PMI
Country 2019 2020 2021 2022*

World 2.8 -3.0 6.0 3.0

Advanced economies 1.7 -4.4 5.2 2.4
United States 2.3 -3.4 5.7 1.7
Europe 1.5 -6.1 5.2 2.9
Japan 0.0 -4.6 1.7 1.7
Emerging economies 3.7 -1.9 6.6 3.5
China 6.0 2.2 8.1 3.2
India 4.8 -6.6 8.3 6.6
ASEAN-5 4.9 -3.4 3.4 5.0
Latin America 0.1 -7.0 6.9 3.0
Emerging Euro 2.5 -1.7 6.8 -0.2
Middle East & Central Asia 1.5 -2.7 4.5 4.4

Consumer Confidence Index Retail Sales

World Trade Volume and Global GDP Commodity Prices

2020 2021 2022
Commodity 2018 2019
Q1 Q2 Q3 Q4 2020 Q1 Q2 Q3 Q4 2021 Q1 Q2 Q3 YTD*
Copper 6.7 -7.8 -7.8 -12.3 11.8 21.6 3.3 50.3 80.3 44.3 33.1 50.2 17.4 -1.8 -17.7 -3.4
Coal 2.5 -8.6 -8.0 -28.2 -27.9 -9.8 -18.5 19.5 92.8 203.9 204.7 123.2 94.1 73.2 11.1 30.4
CPO -19.2 -2.3 33.3 14.0 35.5 34.9 29.4 47.1 84.6 60.4 53.0 59.9 56.7 55.5 -12.2 21.6
Rubber -16.8 12.4 -18.6 -22.7 3.8 36.4 -0.3 37.7 42.7 6.6 -11.2 16.2 1.7 2.2 -6.0 -0.2
Nickel 27.8 7.0 3.8 0.0 -8.1 3.9 -0.1 37.9 41.4 33.7 23.0 33.3 59.4 66.7 16.0 41.6
Tin 0.5 -7.5 -17.2 -20.4 3.1 12.6 -5.5 46.1 86.1 91.1 101.2 82.0 80.6 25.3 -30.3 7.2
Aluminium 7.4 -14.1 -5.8 -15.9 -2.6 9.8 -3.7 22.9 57.7 52.2 43.0 43.6 54.3 20.2 -11.0 12.7
Coffee -15.4 -11.8 14.8 -2.8 2.9 -3.4 3.0 6.7 39.0 55.2 91.4 48.4 82.5 50.8 18.3 30.7
Others 1.2 -0.7 -2.1 -5.6 -4.9 -4.5 -4.3 0.3 7.6 3.9 4.0 3.9 5.2 6.4 7.3 3.9
Indonesian Export
-2.8 -3.0 1.5 -10.4 -1.7 7.5 -0.8 23.7 58.5 79.5 76.5 57.0 47.0 37.7 1.3 16.1
Commodity Prices
Oil (Brent)** 71 64 51 31 43 45 42 61 69 73 79 71 101 113 101 103

7 • Quarter III 2022

Global Uncertainty Index 10 Yr UST & JGB Yield and DJIA Index

Risk Perception on EM and Indonesia Emerging Market Capital Flow

At home, the national economic recovery remains intact

Economic Growth - Expenditure Side Economic Growth – Economic Sectors Side
2020 2021 2022
Components 2020 2021
I II III IV I II III IV I II
Household Consumption 2.83 -5.51 -4.05 -3.61 -2.63 -2.21 5.96 1.02 3.55 2.02 4.34 5.51
Non-Profit Institution Serving
-5.09 -7.76 -1.97 -2.14 -4.29 -3.69 3.99 2.79 3.29 1.59 5.85 5.04
Household (NPISH) Consumption
Government Consumption 3.75 -6.90 9.76 1.76 1.94 2.55 8.06 0.62 5.25 4.17 -7.59 -5.24
Investment (GFCF) 1.70 -8.61 -6.48 -6.15 -4.95 -0.21 7.52 3.76 4.49 3.80 4.09 3.07
Building Investment 2.76 -5.26 -5.60 -6.63 -3.78 -0.74 4.36 3.36 2.48 2.32 2.58 0.92
NonBuilding Investment -1.46 -18.62 -8.99 -4.71 -8.38 1.44 18.50 4.96 10.40 8.42 8.66 9.65
Exports 0.23 -11.66 -11.66 -7.21 -7.70 6.94 31.50 29.16 29.83 24.04 16.69 19.74
Imports -2.19 -16.96 -23.00 -13.52 -14.71 4.41 31.84 29.95 29.60 23.31 15.87 12.34
GDP 2.97 -5.32 -3.49 -2.19 -2.07 -0.70 7.07 3.51 5.02 3.69 5.01 5.44

• Quarter III 2022 8

 Growth of Regional Economic (GDRP) of the Second Quarter of Consumer Expectation Index
2022

Farmers’ Exchange Rate Job Vacancy Index

Retail Sales Online Sales

9 • Quarter III 2022

Realization of State Budget (APBN) Non-oil and Gas Exports
2020 2021 2022
Realization
Realization
ITEMS Realization % Realization Budget as of December Budget PERPRES 98/2022
as of August 2022
(IDR Trillion) PERPRES 72 (IDR Trillion) 2021 (IDR Trillion) (IDR Trillion)
(IDR Trillion)
(IDR Trillion)
A. State Income and Grants 1,647.8 96.9% 1,743.6 2,009.6 1,846.1 2,266.2 1,764.6
I. Domestic Income 1,629.0 95.9% 1,742.7 2,005.1 1,845.6 2,265.6 1,764.1
1. Tax Income 1,285.1 91.5% 1,444.5 1,546.8 1,510.0 1,784.0 1,378.0
2. NonTax Income 343.8 116.9% 298.2 458.3 335.6 481.6 386.1
II. Grant 18.8 1448.7% 0.9 4.5 0.6 0.6 0.5
B. State Expenditures 2,595.5 94.8% 2,750.0 2,773.6 2,714.2 3,106.4 1,657.0
I. Central Government Expenditures 1,833.0 92.8% 1,954.5 1,987.9 1,944.5 2,301.6 1,178.1
1. Employee Spending 380.5 94.3% 421.1 387.7 426.5 426.5 280.0
2. Spending for Goods 422.3 154.6% 362.5 529.6 339.7 339.7 222.2
3. Capital Expenditures 190.9 139.0% 246.8 228.6 199.2 199.2 87.4
4. Payment of Debt Obligations 314.1 92.7% 373.3 343.5 405.9 405.9 234.7
5. Subsidies 196.2 102.2% 175.4 241.0 207.0 283.7 139.8
6. Grant Expenditure 6.3 123.7% 6.8 4.3 4.8 4.8 1.7
7. Social Assistance 202.5 116.1% 161.4 173.6 147.4 147.4 95.9
8. Other Expenditures 120.0 26.6% 207.3 79.5 214.0 494.4 116.4
II. Transfer to Regions and Village Funds 762.5 99.8% 795.5 785.7 769.6 804.8 478.9
1. Transfer to Regions 691.4 99.8% 723.5 713.9 701.6 736.8 428.4
2. Village Funds 71.1 99.9% 72.0 71.9 68.0 68.0 50.4
C. Primary Balance (633.6) (633.1) (420.5) (462.2) (434.4) 342.3
D. Budget Surplus/Deficit (947.7) (1,006.4) (764.0) (868.0) (840.2) 107.6
Surplus/Deficit (%GDP) (6.1) (5.7) (4.5) (4.9) (4.5) 0.6

Non-Oil and Gas Exports to Main Destination Countries Regional Non-oil and Gas Exports

Non-oil and Gas Imports Manufacturing Purchasing Managers’ Index (PMI)

• Quarter III 2022 10

 Import of Construction Goods

Indonesia's Balance of Payments (BOP) remains sound in line with persistently strong non-oil and
gas export performance. Rupiah stability has been maintained despite increasing global financial
market uncertainty and US dollar appreciation
Indonesia’s Balance of Payments Trade Balance
Items (Billion USD) 2020 2021* 2022
2019
I II III IV Total I II III IV Total I* II**
Current Account -30.3 -3.37 -2.91 1.00 0.85 -4.43 -1.09 -1.93 4.95 1.52 3.46 0.41 3.85
A. Goods 3.5 4.59 3.95 9.79 9.97 28.30 7.63 8.34 15.41 12.43 43.81 11.30 16.81
- Exports, fob 168.5 41.78 34.63 40.80 46.19 163.40 49.38 54.32 61.65 67.49 232.84 66.77 75.17
- Imports, fob -164.9 -37.19 -30.67 -31.01 -36.22 -135.10 -41.75 -45.98 -46.24 -55.05 -189.03 -55.47 -58.36
a. Non-Oil and Gas 12.0 5.89 3.29 9.44 11.33 29.95 9.98 11.58 18.12 18.13 57.80 17.21 24.44
b. Oil and Gas -10.3 -2.62 -0.82 -0.71 -1.23 -5.39 -2.27 -3.14 -2.51 -5.04 -12.97 -5.70 -7.17
B. Services -7.6 -1.74 -2.15 -2.77 -3.10 -9.76 -3.39 -3.71 -3.60 -3.96 -14.65 -4.38 -4.97
C. Primary Income -33.8 -7.91 -6.16 -7.40 -7.44 -28.91 -6.75 -8.02 -8.27 -8.91 -31.96 -8.01 -9.51
D. Secondary Income 7.6 1.69 1.44 1.37 1.43 5.93 1.43 1.46 1.42 1.95 6.26 1.49 1.52
Capital and Financial Account 36.60 -3.00 10.99 0.86 -0.93 7.92 5.77 1.66 6.90 -2.10 12.23 -2.13 -1.08
1. Direct Investment 20.5 4.31 4.49 0.99 4.35 14.14 4.49 5.40 3.38 3.84 17.11 4.37 3.06
2. Portfolio Investment 22.0 -6.34 9.74 -1.98 1.95 3.37 4.90 3.99 1.20 -5.02 5.07 -3.19 -0.42
3. Other Investment -6.1 -0.64 -3.37 1.83 -7.46 -9.64 -3.73 -7.76 2.14 -1.01 -10.36 -3.45 -3.64
Overall Balance 4.7 -8.54 9.25 2.05 -0.16 2.60 4.06 -0.45 10.69 -0.84 13.46 -1.82 2.39
Memorandum :
- Reserve Assets Position 129.2 120.97 131.72 135.15 135.90 135.90 137.10 137.09 146.87 144.91 144.91 139.13 136.38
In Months of Imports & Official Debt Repayment 7.3 6.98 8.14 9.12 9.76 9.76 9.66 8.77 8.64 7.76 7.76 6.97 6.41
- Current Account (% GDP) -2.7 -1.22 -1.19 0.38 0.31 -0.42 -0.39 -0.66 1.65 0.48 0.29 0.13 1.14

Foreign Capital Flows Official Reserve Asset

11 • Quarter III 2022

Rupiah vs Peer Countries Peers Country Interest Rate Policies

Inflation is lower than initially projected

CPI Inflation Regional Inflation

Ample liquidity in the banking industry and economy remains. Policy rate hikes are raising money
market rates amid interest rate rigidity in the banking industry. The bank intermediation function
continues to improve and support the economic recovery, and financial system resilience remains
solid
SBN Purchases by Bank Indonesia for State Budget Financing The Ratio of Liquid Assets to Deposits
Trillion IDR %
400 40
358.32
2021 2022* 350 35
Ratio of liquid assets to
300
deposits 27.3530
250 25
200 20
138.08
150 15
100 10
50 5
0 0
Purchase of SBN for State Budget Funding & 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7
Healthcare and Humanitarian Financing 2016 2017 2018 2019 2020 2021 2022

• Quarter III 2022 12

 Money Supply Policy Rate (BI7DRR) and Overnight Interbank Rate
%, yoy % 8

25
7
20
6
M1 15
5.00
LF Rate 5
13.50
M2 10 4.25
BI7DRR
9.10 3.854
3.50
Quasi-money 5 IndONIA
3.80 3
DFRate
0
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 2
1 2 3 4 6 7 8 9 1112 1 2 3 5 6 7 8 101112 1 3 4 5 7 8 9 101112 1 3 4 5 7 8 9 1011 1 2 3 5 6 7 8 9 1112 1 2 3 5 6 7 9 10
2016 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

Banking Interest Rates Policy Rate (BI7DRR) Transmission to Prime Lending Rate (PLR)
% Spread (PLR - BI7DRR) Spread (PLR - 1 Month TD) PLR %
14 1 Month TD BI 7 DRR Interest Rates on New Loans
Working Capital Lending Rate 12
Lending Rate
12
10
8.97 10 8.60 8.94
Deposit Rate 8
8.46 8
5.70
6 4.85 6

3.12 4 4.25
1 Month Deposit Rate 4
3.03 2 3.03
2
0
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 0
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9
2016 2017 2018 2019 2020 2021 2022
2018 2019 2020 2021 2022

Lending Rates on New Loans by Bank Group Banking Industry’s Capital

Regional government banks State-owned banks % Thousand Trillion Rp
% 9
National private commercial banks Foreign bank branches 31 CAR
Risk-weighted 8
14 29
Assets (rhs) 7
12 27 Capital (rhs)
9.97 6
10 25 25.12
9.30 5
23
8 4
7.71 21 3
6
5.95 19
4
2
17 1
2
15 0
0 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9
2014 2015 2016 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021

13 • Quarter III 2022

Credit Risk (NPL) Credit and Deposit Developments
% %
%
30 100
5
25 LDR (rhs) 95
4
90
Gross NPL 2.88 20

3 Credit Growth (yoy) 85

15 82.05
80
2 10 11.00
75
0.79 Deposits Growth (yoy)
1 5 6.77
70
Nett NPL
0 65
0
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 -5 60
1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9
2017 2018 2019 2020 2021 2022
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Bank Indonesia is strengthening payment system policy and accelerating digitalization to improve
the efficiency of economic transactions and support economic recovery
Electronic Money Transactions Value Digital Banking Transactions Value
Trillion Rp %, yoy Trillion Rp %, yoy
120 300 16,000 70
100 Growth (rhs) 250 14,000 60
SMS/Mobile Banking
12,000 Growth (rhs) 50
80 Electronic Money 200 40
Transaction 10,000 Internet Banking
60 150 30
8,000 29.47 20
40 100 6,000 10
4,000 0
20 50
35.8 2,000 -10
0 0 - -20
I II III IV I II III IV I II III IV I II III I II III IV I II III IV I II III IV I II III
2019 2020 2021 2022 2019 2020 2021 2022
Source: Bank Indonesia

Digital Banking Transactions Volume QRIS Transactions Value and Volume

Million Transaction %, yoy Billion Rp Million Transaction
1,200 80 12,000 120
Growth (rhs) 112
1,000 60 10,000 100
40
800 Internet Banking
36.25 8,000 80
20
600 SMS/Mobile Banking 0 6,000 60

400 -20 Volume (rhs)

4,000 40
-40 Nominal
200 -60 2,000 20
- -80 - -
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 1 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8 9
2019 2020 2021 2022 2020 2021 2022

• Quarter III 2022 14

 ATM/Debit and Credit Card Transactions Currency in Circulation
Trillion Rp %, yoy Trillion Rp %
900 40 1,200 30%
800 Debit + Credit Card Transaction 25%
30 Growth Growth CIC
1,000
700 Growth (rhs)
(mtm, rhs) (yoy, rhs)
906 20%
22.86
600 20 800
15%
500 10%
10 7.61%
400 600 5%
686 0.35%
300 0 0%
400
200 -5%
-10
100 200
-10%
0 -20 -15%
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 - -20%
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9
2019 2020 2021 2022
2019 2020 2021 2022

Domestic economic recovery is expected to continue in 2022

Indonesia GDP Projection Current Account Deficit Projection

Credit Projection

15 • Quarter III 2022

• Quarter III 2022 16