Bank Indonesia to Transition from JIBOR to INDONIA Benchmark

Enhancing Credibility in Financial Markets

Bank Indonesia (BI) has made a significant decision to discontinue the publication of Jakarta Interbank Offered Rate (JIBOR) starting from January 1, 2026. This move is part of a broader effort to strengthen the credibility and reliability of the national currency benchmark rate. In place of JIBOR, BI is promoting the adoption of Indonesia Overnight Index Average (INDONIA) as the new benchmark rate for the Indonesian financial market.

Rationale Behind the Transition

The decision to shift from JIBOR to INDONIA is driven by the need for a more robust and transaction-based benchmark rate. INDONIA is calculated based on actual interbank borrowing and lending transactions, making it more accurate, objective, and reflective of real market liquidity conditions. According to Ramdan Denny Prakoso, Executive Director of BI, this transition is part of a broader reform of benchmark interest rates that aligns with global best practices. The goal is to deepen the Indonesian financial market and enhance its overall stability.

Implications for the Financial Sector

The discontinuation of JIBOR and the adoption of INDONIA will have significant implications for the financial sector. Financial institutions and market participants will need to adjust their systems and practices to accommodate the new benchmark rate. This transition is expected to bring about greater transparency and reliability in financial transactions, ultimately contributing to a more stable and robust financial market in Indonesia.