INDONIA (Indonesia Overnight Index Average)
INDONIA is a money market benchmark rate. Calculated periodically, INDONIA is available to market participants for use as a reference to determine lending rates as well as set prices and measure the performance financial instruments. INDONIA is the average interest rate index for unsecured overnight interbank rupiah money market transactions.
INDONIA is calculated based on the average interest rate for unsecured overnight rupiah lending reported by all banks to Bank Indonesia. Therefore, INDONIA is the transaction interest rate based on market transactions. INDONIA is determined using the volume-weighted average of all transaction data on a particular day, as reported by the banks to Bank Indonesia through the commercial bank daily reporting system between 07:00 WIB and 18:00 WIB (with an online correction window until 19:00 WIB).
Bank Indonesia began publishing INDONIA each business day at 19:30 WIB on its official website from 1st August 2018.
INDONIA is expected to replace the overnight JIBOR as the money market benchmark rate. As of 2nd January 2019, Bank Indonesia no longer publishes the overnight JIBOR, with existing financial contracts using the overnight JIBOR as a reference expected to transition to INDONIA as the latest reference for the overnight tenor.
A brief explanation of INDONIA is as follows:
| No |
Subject
|
Description
|
| 1 |
Publication Time
|
19.30 WIB
|
| 2 |
Tenor
|
Overnight |
| 3 |
Calculation Method
|
Volume-weighted average
|
Provisions concerning INDONIA are contained in Bank Indonesia Regulation (PBI) No. 20/7/PBI/2018, dated 24th July 2018, concerning the Indonesia Overnight Index Average (INDONIA) and Jakarta Interbank offered Rate (JIBOR).
Information about INDONIA
Financial Market Development Department
Telp : (021) 2981-4013, 2981-4897
Fax : (021) 2311-325, 3504-296
Email : INDONIA.jibor@bi.go.id
In order to increase the use of INDONIA as Alternative Reference Rate (ARR) to calculate non-overnight term rates which among other things can be done by compound averaging the INDONIA rates throughout certain period, Bank Indonesia publishes Compounded INDONIA. Compounded INDONIA is a term rate calculated by the compounded average interest of INDONIA throughout a certain period.
Bank Indonesia calculates Compounded INDONIA based on INDONIA published on Bank Indonesia's website using a fixed day structure basis, from INDONIA in the beginning of the interest period to 1 (one) day before the publication date of Compounded INDONIA.
Compounded INDONIA is published for standard tenors of 30, 90, 180 and 360 calendar days on Bank Indonesia's website, each business day at 08.00 WIB starting on February 1, 2023. The responsibility to bear any consequences arising from the use of Compounded INDONIA published on Bank Indonesia's website entirely lies with the transacting party.
Brief description of Compounded INDONIA is as follows:
| No |
Subject
|
Description
|
| 1 |
Publication Time
|
08.00 WIB (GMT+7)
|
| 2 |
Tenor
|
30, 90, 180, and 360 calendar days. |
| 3 |
Calculation Method
|
Compounded average interest of INDONIA published on Bank Indonesia's website throughout interest period.
|
INDONIA Index is an index representing accumulated value of compound interest of INDONIA, daily calculated by the Bank of Indonesia. INDONIA Index is calculated based on the values of INDONIA and INDONIA Index published on previous working day in Bank Indonesia’s official website, with the initial value set to 1.000000000 on January 2, 2019. INDONIA index is published on the Bank of Indonesia's website each business day at 8:00 AM WIB starting on February 1, 2023.
Market participants can use the INDONIA Index to calculate the Compounded INDONIA value of certain periode. But it is important to note that the value of standard tenor Compounded INDONIA calculated using INDONIA Index may differ from the value of standard tenor Compounded INDONIA published in Bank Indonesia’s website due to differences in calculation methods. The responsibility to bear any consequences arising from the use of INDONIA Index published on Bank Indonesia’s website entirely lies with the transacting party.
Calculation examples of Compounded INDONIA and INDONIA Index can be seen in PADG No.24/18/PADG/2022 about Amendments to PADG No. 20/19/PADG/2018 about Indonesia Overnight Index Average(INDONIA) and Jakarta Interbank Offered Rate (JIBOR)
Guide to the use of INDONIA on financial instruments issuances and/or transactions can be seen in the User’s Guide to INDONIA.
JIBOR (Jakarta Interbank Offered Rate)
JIBOR is a money market benchmark rate. Calculated periodically, JIBOR is available to market participants for use as a reference to determine lending rates as well as set prices and measure the performance financial instruments. JIBOR is the average indicative unsecured lending rate offered by contributor banks to other contributor banks for rupiah lending in Indonesia with a tenor longer than overnight.
JIBOR is determined by Bank Indonesia based on the indicative offered rates quoted by Contributor Banks to Bank Indonesia during the submission window from 07:00 WIB to 09:30 WIB (with an online correction window until 09:45 WIB). Furthermore, JIBOR is calculated using a simple average of the quotations submitted by Contributor Banks after excluding 15% of the highest and 15% of the lowest offered rates.
Bank Indonesia publishes JIBOR on its official website each business day at 10:00 WIB, consisting of overnight, 1-week, 1-month, 3-month, 6-month and 12-month tenors.
To enhance JIBOR credibility as a money market reference rate, Bank Indonesia has introduced several refinements. As of 2nd January 2019, JIBOR is determined referencing transaction data based on good governance, which is expected to reflect actual market rates in line with international best practices as stipulated in the IOSCO Principles for Financial Benchmarks published by the International Organisation of Securities Commissions (IOSCO).
Enhanced money market benchmark rate credibility is expected to reduce the complexity of financial contracts by facilitating standardisation through the use of reference interest rates for debt instruments and/or lending based on floating interest rates, rupiah interest rate derivatives and for the evaluation of financial instruments.
As of 2nd January 2019, Bank Indonesia no longer publishes the overnight JIBOR. Consequently, JIBOR consists of five tenors, namely 1-week, 1-month, 3-month, 6-month and 12-month tenors, published daily on Bank Indonesia's website at 11:00 WIB of each business day.
A brief explanation of INDONIA is as follows:
| No |
Subject
|
Information
|
| 1 |
Publication Time
|
10.00 WIB
From 2nd Januari 2019:
11.00 WIB
|
2
|
Tenor
|
Overnight, 1-week, 1-month, 3-month, 6-month and 12-month
From 2nd January 2019:
1-week, 1-month, 3-month, 6-month and 12-month
|
3
|
Day Count Convention
|
Actual/360 |
4
|
Calculation Method
|
Simple average after excluding 15% of the highest and 15% of the lowest offered rates.
|
Provisions concerning JIBOR
are contained in Bank Indonesia Regulation (PBI) No.20/7/PBI/2018
dated 24 Juli 2018
concerning the Indonesia
Overnight Index Average andJakarta Interbank Offered Rate.
Information about INDONIA
Financial Market Development Department
Telp: (021) 2981-4013, 2981-4897
Fax: (021) 2311-325, 3504-296
Email: INDONIA.jibor@bi.go.id
