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
