INDONESIA
With a population of 281 million and a forecasted GDP of $1,429bn in 2025, Indonesia is a large emerging‑market economy, with growing diversification and sizeable demographic advantage. External net asset data are not systematically reported, but the country’s external position has historically been moderate — current account deficits and foreign portfolio liabilities suggest a net external liability position.
Public debt remains moderate: government debt has been estimated at about 36 % of GDP, with a fiscal deficit of around 1.3 % of GDP for fiscal year 2023. These figures position Indonesia favorably relative to peers, although exposure to global rate shifts is a concern.
Indonesia benefits from strong commodity export performance and ongoing infrastructure and bureaucratic reforms that aim to support growth. Nonetheless vulnerabilities include shocks to commodity demand, global rate tightening, and institutional constraints.
Population growth (~1.1 %) supports long-term potential, but productivity remains modest. Growth in 2023 was around 5–6 %, with moderate inflation and stable macroeconomic policies.
Key medium-term risks include managing subsidy burdens, climate vulnerability, and deepening structural reforms to sustain growth and public debt sustainability.
Summary
BNP Paribas has been active in Indonesia since 1970 and is currently the only French bank, and one of only a few global banks, with a full service offering in Indonesia. BNP Paribas offers a multi-disciplined team to support a wide range of customer requirements, including cash management and trade finance. The bank has a full banking license which permits activities in all currencies including IDR.
BNP Paribas is a major player in trade finance throughout Asia, offering a full suite of traditional trade (letters of credit, bankers’ guarantee, trade financing, standby letters of credit, etc.) and supply chain financing solutions (receivables purchase programmes, supplier financing etc.) products, including a unique inventory solution offered through its trade centres in Australia, China, Japan and Singapore, specifically for companies engaged in international trade, as part of a wider network of more than 100 trade centres globally. BNP Paribas has experienced trade finance advisors and personnel who deliver a range of customised trade solutions and advise on local market practices. These solutions are supported by the bank's ISO-certified trade services support team.
Currency
- Indonesian rupiah (IDR)
2016 | 2017 | 2018 | 2019 | 2020 | |
Exchange rate: IDR per USD | 13,308.3 | 13,380.9 | 14,236.9 | 14,147.7 | 14,582.2 |
Source: IMF, International Financial Statistics, June 2021.
- The Indonesian central bank is Bank Indonesia (www.bi.go.id).
Bank supervision
- Indonesian banks are supervised by the Financial Service Authority (OJK – www.ojk.go.id/en).
- The Ministry of Finance (www.depkeu.go.id) is responsible for regulating Indonesia's other financial institutions.
Bank accounts
- A company is considered resident in Indonesia if it is domiciled in or incorporated in Indonesia.
Within INDONESIA | Outside INDONESIA | |
Local Currency | Permitted without restriction, fully convertible |
Not permitted |
Foreign Currency | Permitted (cheques are not permitted to be drawn), fully convertible |
Permitted without restriction, fully convertible |
Within INDONESIA | Outside INDONESIA | |
Local Currency | Permitted with restrictions, fully convertible |
Not permitted |
Foreign Currency | Permitted with restrictions, fully convertible |
Not applicable |
- Per item-based charges and/or subscription fees are applied on payments between resident and non-resident bank accounts.
BNP Paribas Cash Management Capabilities
Cash collections | |
Cheque collections | |
Direct debit collections | |
Domestic incoming transfers | |
Virtual IBAN | |
Virtual accounts | |
International incoming transfers | |
Card acquiring |
Cash withdrawals | |
Cheque payments | |
Direct debit payments | |
Domestic outgoing transfers | |
Commercial cards | |
Virtual cards | |
International outgoing transfers | |
SWIFT gpi | |
Real-time international payments through BNP Paribas’ network | |
Card issuing |
Local e-Banking | |
Global e-Banking - Connexis | |
SWIFT/ host to host |
Payments & collections
Cash remains the predominant payment method in Indonesia for low-value transactions; according to a 2020 Worldpay Global Payments Report, cash accounts for 77% of point-of-sale purchases. Credit card penetration is estimated at 0.07 credit cards per capita. However, the launch of QRIS, the national QR standard, in 2019, which ensures interoperability between different payments providers, and the Covid pandemic, has seen the use of digital payments rise. According to Bank Indonesia (BI), the value of electronic money transactions reached IDR 201 trillion in 2020, growing by 38.62% from 2019.With a smartphone penetration rate above 60%, the country is well-positioned to take advantage of digital payment methods; there are already more than 48 e-wallet platforms operating, including GoPay, Dana and OVO.
In 2019, Bank Indonesia published its Payment Systems Blueprint 2025. Its focus is on the development of a digital economy via the digitisation of payments and payment systems. As part of this initiative, the central bank plans to launch BI-FAST (end 2021), a real-time payment infrastructure for card-based instruments, electronic money, and direct to account (credit and debit transfers) schemes. BI-FAST, which will replace the SKNBI, will be available 24/7.
Electronic banking services are available from most banks. There is no national electronic banking standard in Indonesia, so companies use banks’ proprietary services. Online and mobile banking services are available. Online banking adoption is low, but mobile banking usage among smartphone users is high. Regulations for digital banking are expected by end-2021 and will open up banking to the 50% that are unbanked.
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*The date shown may vary by plus or minus one day. These dates are derived by converting from a non-Gregorian calendar (e.g., Muslim or Hindu) to the Gregorian calendar. Some of these dates cannot be determined in advance with absolute accuracy, even by the governing authorities. In the case of Muslim dates in particular, the feast days are determined by the sighting of a new/full moon. | |
SKNBI | Type |
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NPG | Type |
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- Credit transfers are used by companies to pay salaries and suppliers, and to make tax and treasury payments.
- High-value (in excess of IDR 100 million) and urgent IDR-denominated credit transfers are settled on a same-day basis via BI-RTGS.
- Low-value (up to IDR 1 billion) and high-volume credit transfers are settled on a same-day or next-day basis via the Credit Clearing sub-system of SKNBI.
- BI-FAST (up to IDR 250 million)
System holidays: open for incoming, closed for outgoing - In 2020, the volume and value of transactions via SKNBI increased 7.34% and 7.10% respectively, to 166,512.6 thousand, with a value of IDR 4,259.85 trillion.
- Cross-border transfers can be made via SWIFT and settled through correspondent banks abroad.
- Direct debits are used for regular payments, such as utility bills.
- Indonesia does not have a national interbank direct debit system.
- PT Artajasa has implemented an independent interbank direct debit system. Payments can be initiated via ATM terminals.
- Direct debits are arranged on a bilateral basis between banks.
- The cheque is a popular cashless payment instrument, used by companies.
- Post-dated cheques are permitted; cheques must be presented within 70 days of their issue.
- Bilyet giros, which cannot be exchanged for cash, are also available.
- Cheques and bilyet giros are cleared via the Debit clearing sub-system of SKNBI and settled via the BI-RTGS on a next-day basis.
- Card payments are increasingly popular, especially for retail transactions.
- There were 204 million ATM/debit cards and 16.9 million credit cards in circulation in December 2020.
- There are 74 debit card issuers and 25 issuers of credit cards.
- Visa, MasterCard and JCB International-branded credit cards are the most widely issued. Diners Club credit cards are also available. Credit card usage is low.
- Debit card transactions are processed via the NPG.
- There are five debit card clearing operators in Indonesia (Artajasa Pembayaran Elektronis, Daya Network Lestari, Rintis Sejahtera, MasterCard Indonesia and Visa Worldwide Indonesia).
- There are four credit card clearing operators in Indonesia (JCB International, Mastercard Indonesia, Visa Worldwide Indonesia and Rintis Sejahtera).
- All ATM and debit cards must be migrated to the EMV standard by December 31, 2021.
- In 2020, there were 6,658.5 million ATM/debit card transactions (7,026.9 million in 2019), with a value of IDR 6,916,875,229 million (IDR 7,474,823,816 million in 2019).
- There were 100,653 ATMs in April 2021.
- There were 1,510,091 POS terminals in April 2021.
- There are five domestic ATM networks (Bersama, Prima, LINK, Cakra and ALTO.
- Payments at international ATM networks (Cirrus (nine banks are Cirrus members) and Plus (10 banks are members)) are settled by Visa and MasterCard.
- POS payments are processed by the Debit BCA network, the Kartuku POS network, Visa and MasterCard.
- All ATMs and POS terminals are EMV-compliant.
- The dominant forms of electronic wallet schemes in Indonesia are pre-paid cards. These cards have a limited maximum spend of IDR 20 million per month.
- There were 483 million e-money cards in circulation in April 2021.
- There were 652,185 electronic money readers in Indonesia in April 2021.
- There are 49 institutions currently offering e-money schemes in Indonesia.
- Mobile wallet schemes are available. Popular mobile wallets apps are GoPay, OVO and DANA. LinkAja is a state-owned mobile payment platform.
- QRIS is the national QR Code standard, the QRIS. There is a maximum limit of IDR 2 million per transaction when using QRIS.
- In 2020, there were 4.625 million e-money transactions (5,226 million in 2019), with a value of IDR 204,909,170 million (IDR 145,198,616 million in 2019).
Short term investments
Interest payable on credit balances
- Interest-bearing current accounts are permitted in Indonesia. Accounts in domestic and foreign currency are available.
Demand deposits
- Demand deposits denominated in IDR or major foreign currencies are available for terms up to one year.
Time deposits
- Time deposits are available in IDR or major foreign currencies with terms ranging from one month to two years.
Certificates of deposit
- Domestic banks issue certificates of deposit (CDs) with terms ranging from one week to 12 months. CDs can be issued paying fixed or variable interest.
Treasury bills
- The central bank issues short-term government bills (SPN) for terms of one, three, six months and 12 months. Islamic T-bills (SPN-S) are issued with a six-month maturity.
- Domestic commercial paper is not commonly issued in Indonesia.
- Maturities range from one week to 12 months.
Money market funds
- Domestic money market funds are popular short-term investment instruments.
Repurchase agreements
- Repurchase agreements with maturities of one, three and six months are commonly available in Indonesia.
Bankers acceptances
- Banker’s acceptances are not commonly used in Indonesia. Where available, they are generally based on an underlying trade transaction such as financing imports.
BNP Paribas Trade Finance Capabilities
Documentary credits | |
Documentary collections |
Bank guarantees | |
Standby letters of credit |
Receivables | |
Payables | |
Inventory |
Connexis Trade | |
Connexis Supply Chain | |
SWIFTNet Trade for Corporates | |
Connexis Connect | |
Connexis Guarantee | |
SWIFTnet Supply Chain |
- BNP Paribas' Global Trade Solutions (GTS) team in Indonesia comprises a senior trade manager and offers a comprehensive suite of trade products in conventional trade and supply chain management. The GTS team supports some of the biggest names in the retail and commodity industries based on its expertise, strength of solutions and access to the BNP Paribas international trade network.
International trade
- As a member of the Association of Southeast Asian Nations (ASEAN), Indonesia has entered into the ASEAN Trade in Goods Agreement (ATIGA) between member states (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam). Indonesia is also a member of the ASEAN Free Trade Area (AFTA) and is committed to reducing and eliminating tariffs between members.
- As a member of the Asia-Pacific Economic Cooperation (APEC) forum, Indonesia has agreed to liberalise trade and investment rules between members.
- As a signatory to the D-8 Preferential Tariff Agreement, Indonesia has agreed to reduce tariffs on trade between member states (Bangladesh, Indonesia, Iran, Malaysia, Egypt, Nigeria, Pakistan and Turkey).
- ASEAN has signed free trade agreements (FTAs) with Australia, China, EFTA member states, Hong Kong, Japan, India, New Zealand and South Korea. It is negotiating an FTA with the EU.
- Indonesia has an Economic Partnership Agreement with Japan and Australia, and has a bilateral investment treaty with Singapore. It has signed an FTA with Mozambique but this is not yet in effect.
- Indonesia is in negotiations with Bangladesh and Iran for a preferential trade agreement. FTA negotiations have been launched with a number of other countries, including Switzerland, Turkey and Tunisia.
Imports | Refined petroleum | Crude petroleum | Vehicles | Telephones | Natural gas | |
Primary Import sources | China (27.0%) | Singapore (12.0%) | Japan (8.0%) | Thailand (5.0%) | USA (5.0%) | South Korea (5.0%) |
Exports | Coal | Palm oil | Natural gas | Cars | Gold | |
Export markets | China (15.0%) | USA (10.0%) | Japan (9.0%) | Singapore (8.0%) | India (7.0%) | Malaysia (5.0%) |
2016 | 2017 | 2018 | 2019 | 2020 | ||
Exports | - goods USD m | 144,470 | 168,883 | 180,725 | 168,455 | 163,355 |
- services USD m | 23,324 | 25,328 | 31,207 | 31,641 | 14,907 | |
Imports | - goods USD m | 129,152 | 150,069 | 180,953 | 164,948 | 135,141 |
- services USD m | 30,407 | 32,707 | 37,692 | 39,282 | 24,502 | |
Current account as % GDP | – 1.8 | – 1.7 | – 2.9 | – 2.7 |
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Sources: IMF, International Financial Statistics, June 2021.