The Central Bank sets a plan for banking reform.
The Central Bank of Iraq has identified several key points for the banking reform plan it agreed upon with the global firm Oliver Wyman, while a financial expert explained that the plan includes 4 main aspects.
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Central Bank spokesman Alaa Al-Fahd told Al-Sabah newspaper: "This plan is the most important strategy undertaken by the Central Bank to develop the financial and banking sector in Iraq, in cooperation with the global company Oliver Wyman."
He pointed out that "the plan is about digital and electronic transformation, diversifying the base of financial inclusion and moving away from paper transactions, so that local banks will be at a level comparable to global and regional banks."
Al-Fahd added that "this plan needs time to be implemented, despite the existence of very large challenges that it may face," expecting "the banks' agreement to enter into the reform plan to be a successful first step towards a path that extends from 3 to 5 years."
He explained that "the turning point is the opening of a branch of the Arab Bank in Baghdad, which is evidence of competition in the local, Arab, regional, and international banking sector. This will ensure that banks in Iraq are on par with those in the UAE and Saudi Arabia. Implementing this in cooperation with the global company will enable these banks to operate at a world-class level of financial services, improve their quality, develop human resources, and implement technological transactions and cybersecurity within a comprehensive plan for technological, financial, and banking reform and development in Iraq." For his part, financial expert Mahmoud Dagher stated that the banking system always needs review and reform, which has become essential after many negative aspects affected its performance.
In an interview with Al-Sabah, Dagher added that "the documents submitted by Oliver Wyman, in partnership with the Central Bank and in coordination with the US Treasury, include fundamental reforms related to four main criteria, each with a specific timeframe, stages, and tests." He pointed out that "if any bank can achieve these projects and meet these timeframes, restrictions can be lifted, and its status improved to align with international standards." He continued, "The first criterion is the ownership structure, which focuses on preventing any single group from dominating the capital. The second criterion is the business plan, which stipulates that the bank must diversify its products and not rely on a single product. The third is financial metrics; the bank must achieve a set of financial ratios appropriate to its performance, such as capital and liquidity ratios, commensurate with its performance and the effort it faces. The fourth is the compliance and anti-money laundering criterion." Dagher expressed his belief that "the documents, the plan, and the meetings with the banks are appropriate, and we are waiting for the implementation processes after the banks agreed to participate in this correction and most of them chose one of two paths: the first is to continue alone as they are with their license, or to merge several banks to produce a new bank, with a few preferring to withdraw."
The financial expert explained that "what is important is what will happen at the beginning of next year in terms of applications, smoothness, and incentives from the Central Bank, which is leading the reform process, and the response process from the banks participating in this banking reform, which ends in 2028," noting that "any bank that applies these standards can, within a short period not exceeding the middle of next year, exceed all the rules based on the standards, and get out of the restriction or achieve a level that is compatible with international standards."
shorter version
Central Bank: Developing a "global" plan to reform Iraqi banks in agreement with Oliver Wyman
The Central Bank of Iraq identified several key points for the banking reform plan agreed upon with the global company "Oliver Wyman", noting that a turning point had been reached with the opening of a branch of the "Arab Bank" in Baghdad, so that banks in Iraq would be no less than the banks of the Emirates and Saudi Arabia.
Central Bank spokesman Alaa Al-Fahd said, “The plan is the most important strategy undertaken by the Central Bank to develop the financial and banking sector in Iraq in cooperation with the global company (Oliver Wyman),” noting that “the plan is represented by digital and electronic transformation, diversifying the base of financial inclusion and moving away from paper transactions, so that local banks will be at a level comparable to global and regional banks.”
Al-Fahd added that "this plan needs time to be implemented despite the existence of very large challenges that it may face," expecting "the banks' agreement to enter into the reform plan to be a successful first step towards a path that extends from 3 to 5 years . "
He explained that "the turning point is the opening of a branch of (Arab Bank) in Baghdad, which is evidence of competition in the local, Arab, regional and international banking sector, so that banks in Iraq are no less than the banks of the Emirates and the Kingdom of Saudi Arabia, and its application in cooperation with the global company makes these banks operate at a global level of financial services, improve their quality, develop human resources and apply technological transactions and cybersecurity within a comprehensive plan for technological, financial and banking reform and development in Iraq."
Central Bank,
An expert: 90 trillion dinars are hoarded by Iraqis and do not reach the banks.
Financial expert Mahmoud Dagher revealed on Sunday that the amount of cash held by the "public" is estimated at about 90 trillion dinars, out of a total of 98 trillion dinars that is the size of the cash mass in Iraq.
Dagher, who previously served as a director at the Central Bank of Iraq, told Shafaq News Agency that "the volume of issued cash is around 98 trillion dinars, of which 88 to 90 trillion are in the hands of the public."
He added, "The public does not only mean the people, but also the merchants, the contracting companies, and the industrialists," explaining that "Iraqis hoard money instead of depositing it in banks, because our society likes to deal in cash and needs a long time to get used to electronic payment methods, in addition to the lack of trust in banks among some depositors after the setbacks that occurred in the banks."
He pointed out that "all these matters are considered behavioral issues, as people are accustomed to keeping a portion of their money, and so are companies, therefore Iraqis think this way."
According to specialists, this phenomenon has many negative aspects, including that the central bank loses its actual control over the money supply, and that its tools such as the interest rate or rediscount become less effective, while banks suffer from a shortage of liquidity, which weakens their ability to finance projects and pushes investors towards informal financing, in addition to the difficulty of managing inflation due to the money supply not officially circulating, which negatively affects the central bank’s decisions in achieving its main goal, which is to control the general level of prices and achieve stability.
Iraqis hoard trillions of dinars, weakening banks
Nearly 90 trillion dinars ($69 billion) – 92% of Iraq’s 98 trillion-dinar money supply – remain outside the banking system, former Central Bank of Iraq (CBI) official Mahmoud Dagher revealed on Sunday.
Dagher told Shafaq News that individuals, traders, and contractors prefer cash over deposits due to distrust in banks and slow adoption of electronic payments, worsened by repeated banking crises.
Hoarding cash, he warned, drains liquidity and undermines the Central Bank’s ability to curb inflation or steer lending. “When most money is outside the system, monetary policy loses impact."
CBI data confirms that 53% of Iraq’s money supply is now in circulation, up from 49% a year ago. Only 19% of adults hold bank accounts, and 10% use digital payments. The government is expanding salary transfers, deposit insurance, and e-payment systems to draw idle cash into banks.
Financial expert: People do not trust banks and are storing their money at home.
Financial expert Mahmoud Daghir revealed on Sunday that the amount of cash held by the public is estimated at around 90 trillion dinars, out of a total money supply of 98 trillion dinars in Iraq.
Daghir, a former director at the Central Bank of Iraq, stated in a press interview that “the total amount of currency issued is around 98 trillion dinars, of which 88 to 90 trillion is held by the public.” He added, “The public doesn't just mean individuals, but also merchants, contracting companies, and industrialists.”
He explained that “Iraqis hoard money instead of depositing it in banks because our society prefers cash transactions and needs a long time to adapt to electronic payment methods. Moreover, some depositors lack confidence in banks following recent setbacks.” He pointed out that “these are all behavioral issues. People are accustomed to holding onto a portion of their money, and so are companies. This is how Iraqis think.”
According to specialists, this phenomenon has many negative aspects, including that the central bank loses its actual control over the money supply, and that its tools such as the interest rate or rediscount become less effective, while banks suffer from a shortage of liquidity, which weakens their ability to finance projects and pushes investors towards informal financing, in addition to the difficulty of managing inflation due to the money supply not officially circulating, which negatively affects the central bank's decisions in achieving its main goal, which is to control the general level of prices and achieve stability.
Kujer: Iraq's economic concerns are not serious and the new government will overcome them.
Kujer explained in his interview with Al-Furat News Agency that "regarding the economic situation in Iraq and the concerns related to the new government, these concerns are not that serious, otherwise the same political parties would not have come forward for the elections."
He added that "there will certainly be solutions and the next government will overcome this due to the availability of economic resources."
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Trump's envoy to Iraq begins his work by replacing military bases with investments.
On the day that Mark Savaya, President Donald Trump's envoy to Iraq, officially began his duties in Baghdad, the investment climate was already primed for the new American role.
The massive contracts signed by the Iraqi government in recent months in the energy, airport, and financial reform sectors appeared to be a practical prelude to Washington's return to Iraq, but this time through investment rather than military bases.
What has changed?
In recent weeks, major US deals in energy, airports, and financial reform have been announced, ranging from binding contracts to memoranda of understanding paving the way for future financing. The most prominent include:
– Baghdad International Airport: A consortium led by Corporacion America Airports (CAAP) won a contract to develop and operate the airport with an investment of approximately $764 million, without government spending during the concession period.
– Liquefied Natural Gas (LNG): An agreement with Excelerate Energy to build the first floating LNG platform in Khor Al-Zubair, Basra, at a cost of approximately $450 million and with a processing capacity of up to 500 million cubic feet per day.
– Akkas Gas Field (Anbar): A contract with SLB to increase production to 100 million cubic feet per day after the cancellation of a previous contract.
– Electricity: A memorandum of understanding with GE Vernova to add approximately 24,000 megawatts of generating capacity, pending the completion of financing and implementation arrangements.
– Financial and banking reform: Advanced cooperation with Oliver Wyman on the Central Bank's program to restructure the banking sector and enhance compliance following US restrictions on dollar transactions, in addition to its advisory role in financing the Development Road project.
– Exxon Mobil's return: Baghdad and Exxon are on the verge of an agreement to develop the Majnoon oil field and cooperate on storage and export facilities, marking a return after its withdrawal from West Qurna-1 in 2023–2024.
Politics in the service of the economy:
Savaya's announcement today (November 2, 2025) of its commencement of operations in Baghdad is a political translation of an existing economic trajectory. Fox News confirmed that Savaya was tasked with "expanding economic relations with the Iraqi government and creating a more transparent business environment for American companies."
Observers believe that Washington has chosen the economy as a new gateway to influence after years of military and political decline, while Baghdad is trying to capitalize on this return to stimulate the economy and alleviate financial pressures.
But...
– Have these investments ended the stagnation of the past decade?
– Partially, yes, if their conditions are met.
According to an analysis published by Gasworld, the Excelerate Energy agreement represents “the beginning of restoring mutual trust” between Baghdad and Washington, and is an indication of the United States’ seriousness in returning to direct investment after a decade of stagnation.
However, this path faces three key obstacles:
1. The dollar issue and compliance: Continued US Treasury restrictions on Iraqi banks make financial stability a prerequisite for any investment expansion.
2. Security stability: Savaya's statements link economic partnership to the state's monopoly on the use of force, meaning that the security environment remains a crucial factor.
3. The legal framework: The success of energy projects hinges on stable contracts and financing, which has previously been hampered by the withdrawal of major companies like Shell and Exxon.
In short!
The arrival of Trump's special envoy in Baghdad and the influx of American companies represent a dual attempt to rebuild trust and build soft economic influence in Iraq.
If Baghdad succeeds in stabilizing its security, financial, and legal environment, this could mark the beginning of a new chapter in the US-Iraqi partnership after a decade of stagnation.
However, if bureaucracy and security obstacles persist, these contracts will remain missed opportunities… or as Trump put it: “Iraq has a lot of oil, but they don’t know what to do with it.”
3 key tasks on the agenda of Trump's envoy to Iraq
Press reports revealed on Monday three main tasks on the agenda of Trump’s envoy to Iraq, Mark Savva: reducing the presence of Chinese companies in Iraq, influencing the shape of the next Iraqi government away from Iranian influence, and finding a specific formula for the Popular Mobilization Forces.
Reports followed by Al-Mirbad, quoting American diplomatic sources, stated that “the new American envoy to Iraq, Mark Savaya, carries an agenda with which he will begin his work in Baghdad, based on 3 axes, the foremost of which is not renewing the work contracts of Chinese oil companies in the Iraqi oil fields, and that American companies will replace them.”
The sources explained that “the other tasks assigned to Savaya by Trump, to work on supporting the formation of a government in Iraq following the parliamentary elections scheduled for 11/11, are not subject to any pressure from Iran and are not controlled by the influential factions and currents loyal to Tehran.”
The sources confirmed that "the third axis that Savaya is tasked with working on and arranging upon assuming his position in Baghdad is to prepare a plan that Washington can act upon to find a real solution to the Popular Mobilization Forces issue."
Hussein Al-Asaad: Washington seeks to influence the shape of the next Iraqi government
Political analyst Hussein Al-Asaad said that sending a special US envoy to Iraq at this time is not a routine step, but rather comes within an American move to address sensitive political issues before the Iraqi elections, noting that the presence of the envoy, Savanna, reflects Washington’s desire to directly influence the shape of the next government.
Al-Asaad explained to “Al-Manassat Al-Jarida” that “an ambassador is usually present when relations are normal between two countries, while a special envoy is only sent in the event of urgent and specific issues,” noting that the United States used this approach in similar cases in Lebanon, Syria and Gaza.
He explained that Washington currently views Iraq as a key arena for putting pressure on Iran and reducing its influence in the region, especially after the renewed talk of sanctions and the decline of the Iranian regional role. He stressed that the US administration wants to have a clear imprint on the formation of the next Iraqi government, so that it can ensure “the passage of its political vision and prevent armed groups from entering the executive government.”
Al-Asaad added that the United States might tolerate the presence of some armed groups in parliament, but it “will not accept their participation in the government,” predicting that the next government will be a simple majority government based on specific balances to avoid the influence of “political weapons.”
He also pointed out that the visit of the American envoy “Savannah” was not a coincidence, as his selection – according to Al-Asaad – “came because he has a wide network of relations with the Iraqi parties, and he has previously dealt with the file of releasing Israeli hostages, which makes him qualified to manage complex files.”
In a deeper analysis, Al-Asaad pointed out that the US envoy’s moves may pave the way for what he described as “drawing the features of a new federalism for Iraq,” explaining that the decline of Iranian influence and the increase in US pressure on armed factions may open the door to activating federalism projects that were stalled by previous regional balances.
Al-Asaad concluded his remarks by saying that Washington, through this move, seeks to rearrange the Iraqi political landscape and adjust the balance of power, in line with its new regional vision after the events of October 7, and in a way that ensures – as he put it – “the neutralization of weapons from political decision-making in Iraq.”
Increased gas investment in Iraq
The South Gas Company, affiliated with the Ministry of Oil, announced on Sunday a significant increase in the quantities of gas invested in Iraq, reaching 1750 million cubic meters, noting that it supplies 1600 million cubic meters of it to power stations and industrial plants.
The company's production manager, Shaker Laibi, said: "Gas investment projects are among the most complex projects in the oil industry and require long periods of time to complete," indicating that "the continuous efforts since 2013 until now have resulted in a significant increase in the quantities of gas invested in the country ."
He added that “the quantities of gas invested previously ranged between 300 and 350 million standard cubic feet, while currently in the southern region, which includes the governorates of Basra, Nasiriyah and Amarah, it has reached about 1750 million standard cubic feet of gas,” noting that “this percentage is high and is expected to increase during the coming years within the framework of expansion and investment projects to reach the goal of (Zero Flare), that is, the complete cessation of gas flaring .”
He confirmed that "the southern region is currently supplying 1,500 to 1,600 million standard cubic feet of dry gas to power generation plants and industrial facilities," noting that "the Ministry of Oil has developed a strategic plan to invest all the gas produced throughout the country, especially in the southern region as it is the largest producer, as the plan includes investing all quantities of gas by 2028. "
Laibi stated that "the current government has made gas investment a top priority, and the past period has witnessed a clear revival in this sector through the opening of new projects and the signing of important investment contracts," noting that "during the next few years, additional projects will be introduced to raise the current investment rates, which have exceeded 70%, and it is hoped that they will rise even more during the coming period ."
He confirmed that "gas processing plants produce three types of products: dry gas, liquefied gas used for cooking purposes, and oil condensates."
US report: Sudan is applying the "Kurdistan Region lesson" to attract oil giants and gain influence in Washington
An analytical report issued by the Atlantic Council stated that the Iraqi oil sector is witnessing an "unexpected" transformation, represented by a strong and sudden return of major American energy companies, after years of Chinese and European companies dominating the scene.
The report stated that in the past two months alone, giants such as ExxonMobil, Chevron, HKN, and oilfield services giant KBR signed major deals with the government in Baghdad. Meanwhile, GE Vernova is expanding its operations in Iraq's electricity sector.
But the report warned that this return, despite the enormous business opportunities it presents, "remains fraught with serious political risks that could undermine the fortunes of these companies overnight," as the Iraqi elections approach.
A calculated political dance
The Atlantic Council notes that the timing of this sudden activity is no coincidence. It reflects, at least in part, a calculated political dance between Baghdad and Washington. “It appears that Iraqi Prime Minister Mohammed Shia al-Sudani has discovered what the Kurdistan Regional Government learned long ago: that oil and gas deals are an effective tool for buying political influence in Washington.”
According to the analysis, the Sudanese president also hopes that these new deals will guarantee him crucial American support in his bid to win a second term.
Why now? A business logic and "fundamentally different" contracts.
For American companies, the business logic is clear and straightforward. Iraq offers some of the cheapest oil in the world to produce, with enormous reserves, representing "one of the last great opportunities" for major international oil companies facing depletion elsewhere.
An additional incentive, particularly for ExxonMobil and Chevron, is their desire to secure a "safety net" against potential problems with their massive investments in Kazakhstan, where both companies face government pressure to amend contracts. Should their investments encounter difficulties, Iraqi production would provide a crucial backup.
But the Atlantic Council report emphasizes that "what really changed the game" were the new contracts on offer. The old agreements, known as "technical service agreements" introduced in 2009, were off-putting to American investors because of their fixed per-barrel fees and extremely limited profit margins, which had previously led companies like Chevron to withdraw.
The latest deals, however, are "fundamentally different." They were negotiated directly with the Iraqi Ministry of Oil based on a contractual formula that gives companies a larger share of the total profits and, more importantly, gives them access to actual barrels of crude that they can trade for their own benefit, which completely changes the profitability model.
Baghdad's calculations: Political survival and the "oil card"
Commercial considerations only tell half the story. The report explains that Sudan's eagerness to sign these deals is primarily about "political survival," both for himself and for Iraq.
"On the one hand, Sudani is using these deals as part of his ambitious investment agenda to present an image of an 'effective administrator' to the Iraqi people, something he desperately needs to bolster his political momentum ahead of the upcoming elections. On the other hand, these moves reveal deeper concerns in Baghdad. Escalating tensions with Washington over Iraq's long-standing ties with Iran (including allegations of smuggling Iranian crude) have raised genuine fears of potential US sanctions on Iraq's oil industry, the country's economic lifeline," the report stated.
The Iraqi government also fears possible Israeli military strikes against Iranian-backed armed groups, and believes that only the United States is capable of restraining Israel.
Therefore, al-Sudani seeks to appeal to the Trump administration's "commercial instincts" by offering what it values most: business opportunities for American companies. The strategy, as the report describes it, is borrowed directly from the Kurdistan Regional Government's "manual," where al-Sudani bets that American companies investing billions of dollars will become de facto lobbyists in Washington, defending Baghdad against any policies that might destabilize their investments.
"The Unknown Paper": Elections and the Danger of Bureaucracy
The Atlantic Council warned that all these gains could evaporate depending on the results of the upcoming Iraqi elections in November, and the expected "chaotic government-formation circus" that will follow.
The problem, the report states, is that al-Sudani's main rivals—within the powerful Shiite Islamist factions—want him gone. He is seen as "too independent" and "too powerful," and therefore a direct threat to their patronage networks and vested interests. His success in centralizing decision-making and his growing popularity have made him "dangerous" in their eyes.
Even if the Sudanese candidate wins by a simple majority, these opponents might unite to remove him in favor of a "more compliant and less risky" alternative. This is where the greatest risk lies for American companies.
The report describes al-Sudani as "the most administratively effective Iraqi prime minister since 2003," having succeeded through personal oversight in expediting negotiations and bringing deals to fruition. While al-Sudani's departure may not end investment attraction efforts, it foreshadows a return to the "administrative inefficiency," "bureaucratic problems," and "stagnation" that characterized previous governments—the very reasons that drove these companies away from Iraq in the first place.
In short: a political gamble
The Atlantic Council concludes its report by saying that "above-ground factors"—politics, personalities, and the nature of US-Iraqi relations—will always be more important than geology or attractive trade terms in Iraq.
Sudani has created a "window of opportunity," but windows in Iraq "have a tendency to close suddenly and unexpectedly." Returning American companies are betting that the political winds will remain favorable, and perhaps even that Sudani himself will stay in power.
It's a gamble, the report says, because the next phase of Iraqi politics is uncertain. The question is not whether Iraq offers attractive opportunities (which it does), but rather how the political risks will shape the investment climate over the next year.
The Iraqi Development Fund signs 5 memoranda of understanding with foreign countries
The Iraqi Development Fund announced the signing of memoranda of understanding with five foreign countries, while indicating that there is an effort to establish an Iraqi-American investment fund.
The director of the Iraq Development Fund, Mohammed Al-Najjar, said that the fund had signed several memoranda of understanding with a number of countries, including Japan, Germany, France, Britain and America.
He noted that the memoranda of understanding with Britain were signed to provide continued support to the fund, which helped in rewriting many of the documents that make the fund globally accessible and able to be dealt with internationally.
He added that “there are great prospects in the memoranda of understanding with the United States of America, and we are seeking to establish an Iraqi-American investment fund, explaining that there will be a trip to America soon to turn the project into reality.”
Bank Indonesia to Issue Digital Rupiah, Digital Version of SRBI
Bank Indonesia will launch Digital Rupiah, a digital version of Bank Indonesia Rupiah Securities, with a phased development plan until 2030.
Bank Indonesia will launch the Digital Rupiah, a digital version of Bank Indonesia Rupiah Securities, with a phased development plan until 2030.
Bank Indonesia (BI) will issue a digital rupiah financial instrument. BI Governor Perry Warjiyo likened the digital rupiah to a digital version of Bank Indonesia Rupiah Securities (SRBI).
"We will develop the Digital Rupiah, such as the Bank Indonesia Rupiah Securities [SRBI], which will have a digital version: the Bank Indonesia Digital Rupiah, which will be based on SBN [government securities]. This is the official national stablecoin [stable value crypto asset] of Indonesia," said Perry.
However, he did not provide further explanation regarding the Digital Rupiah. Perry only stated that BI will focus on expanding digital acceptance services, strengthening the ecosystem, and taking various steps to strengthen the industrial structure, as well as maintaining infrastructure stability to support the development of the Digital Rupiah.
Meanwhile, according to the Indonesian Payment System Blueprint 2030, the Digital Rupiah is defined as securities issued and/or transferred within a distributed ledger technology ecosystem. The explanation states that the Digital Rupiah will be developed in stages until 2030. In the first phase, in 2025-2026, experimentation will focus on use cases for issuing, transferring, and withdrawing digital securities on the securities ledger.
In his explanation, the Digital Rupiah will be developed in stages until 2030. The first phase, in 2025-2026, will focus on experimentation with the use cases of issuing, transferring, and withdrawing digital securities on the securities ledger.
In the second phase, in 2027-2028, experimentation will be expanded to use cases for monetary operations and transactions in financial markets. In the third phase, in 2029-2030, experimentation will focus on utilizing programmability, composability, and tokenization capabilities for financial market deepening. BI-FRN Issuance: In addition to the Digital Rupiah, BI also plans to issue other new securities, namely the BI-FRN (Floating Rate Note). The plan to issue the BI-FRN was first announced by BI Governor Perry Warjiyo in the online announcement of the results of the October Board of Governors Meeting (RDG) on Wednesday (10/22/2025). "Issuing the BI-FRN and developing the Overnight Index Swap (OIS) for tenors above overnight will form an interest rate structure based on transactions in the money market," said Perry. The Director of the BI Economic & Monetary Policy Department, Juli Budi Winantya, added that the BI-FRN will be a new monetary instrument that complements the existing monetary instrument, the SRBI. "Going forward, SRBI will be supplemented with BI-FRN to enrich instruments and deepen the financial market," Juli stated at the BI Journalist Training in Bukittinggi, Friday (10/24/2025). Meanwhile, the Executive Director of the BI Communication Department, Ramdan Denny Prakoso, revealed that details regarding the issuance of BI-FRN will be announced in the first week of November 2025. He only hinted that BI-FRN will be directed to support the real sector. "We will expand to other high-quality securities. What form will it take? It will be announced later [in the first week of November 2025], but the goal is to deepen the domestic financial market so that it can support the real sector by increasing credit distribution," Denny explained at the BI Journalist Training in Bukittinggi, Friday (10/24/2025). Previously, the central bank had highlighted the slow transmission of the policy interest rate reduction, aka the BI Rate, to banking interest rates. On the one hand, the central bank has cut the BI Rate by 150 basis points (bps) from 6.25% to 4.75% in the past year. On the other hand, the one-month deposit interest rate has only fallen 29 bps since the beginning of 2025, to 4.52% in September. In fact, the decline in bank lending rates has been slower, at only 15 bps since the beginning of 2025, to 9.05% in September. "[The reduction in deposit and lending interest rates] is what we continue to push for. Of course, to stimulate economic growth. That's the effectiveness of interest rate transmission," said Perry.
a shorter less chaotic version
Indonesia plans digital version of rupiah for financial market
Bank Indonesia will introduce Rupiah Digital, a digital version of Sekuritas Rupiah Bank Indonesia (SRBI), as part of a phased rollout through 2030.
The central bank plans gradual development, starting with experimentation in digital securities issuance, transfers, and withdrawals from 2025 to 2026.
Further testing will cover monetary operations and financial market transactions between 2027 and 2028, followed by advanced features such as programmability, composability, and tokenization in 2029 to 2030.
Rupiah Digital will be built on distributed ledger technology, according to the central bank’s Payment System Blueprint 2030.
Bank Indonesia also plans to issue BI-FRN, a new floating-rate note, to complement its existing monetary instruments.
Details on BI-FRN will be released in early November.
The instrument is intended to support the domestic financial market and real sector.
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