The Indonesian Central Bank (BI) has officially discontinued the publication of the Jakarta Interbank Offered Rate (JIBOR) effective January 1, 2026 and designated the Indonesia Overnight Index Average (INDONIA) as the sole benchmark rate for overnight interbank rupiah transactions, a move dedicated to strengthen the credibility and reliability of the rupiah benchmark interest rate.

Arief Rachman, Head of BI’s Financial Market Development Department Group, said the transition was driven by the superior accuracy and objectivity of INDONIA, which is based on actual market transactions rather than quoted rates.

“Why do we use transaction-based prices? Because they better reflect real market conditions. INDONIA therefore meets the requirements of a credible benchmark interest rate,” Arief told a media conference in Jakarta on Wednesday, January 7, 2025.

INDONIA is calculated based on the weighted average of actual overnight interbank lending transactions involving all 91 conventional banks in Indonesia. In contrast, JIBOR relied on indicative quote submissions from only 17 contributing banks, making it less representative of overall market liquidity.

The reform aligns Indonesia with global benchmark interest rate reforms following the discontinuation of the London Interbank Offered Rate (LIBOR) in 2021, after manipulation scandals involving several contributing banks undermined confidence in quote-based benchmarks. Prior to JIBOR, Indonesia’s financial markets had also relied on LIBOR as a reference rate.

Arief said the shift from JIBOR to INDONIA is expected to enhance the credibility and global competitiveness of Indonesia’s financial markets. As a member of the G20, Indonesia is also obligated to implement international recommendations on benchmark interest rate reform.

“We are a G20 member, and we have an obligation to implement the recommendations agreed at the G20 level. This transition is part of that commitment,” Arief said.

BI emphasized that the reform was carried out with thorough preparation in coordination with financial market participants. INDONIA has been published in parallel with JIBOR since August 1, 2018, allowing sufficient time for market adjustment.

“The transition from JIBOR to INDONIA has been carefully prepared by Bank Indonesia and market participants,” BI Executive Director for Communications, Denny Prakoso, said as quoted by Katadata.co.id, in a written statement released in late 2025.

The decision to terminate JIBOR was first announced on September 27, 2024, accompanied by a JIBOR Transition Guideline issued by the National Working Group on Benchmark Reform (NWGBR). Market participants have gradually shifted their contracts to reference INDONIA.