Big banks' lending rates use as JIBOR's basis

JAKARTA (JP): Bank Indonesia is using the lending rates of 24 major commercial banks as the basis for the newly-launched Jakarta Inter-bank Offered Rates (JIBOR).

The central bank announced yesterday that the 24 banks comprised seven state-owned banks, 10 private domestic banks and seven foreign banks.

The JIBOR, which was formally launched on Thursday, is transmitted daily to the central bank's Electronic Money Market Information System, Reuters and Telerate.

The JIBOR covers reference rates for overnight transactions and those with maturities of one week, one month, three months and 12 months. Information on indicative interest rates includes average, highest and lowest levels, based on lending rates supplied by the 24 banks to the central bank's money market information system before 11:00 a.m. each day.

There were previously three different benchmark rates in Indonesia: Bank Indonesia's, Reuters' and Telerate's.

In order to resolve the difference and to provide more reliable and representative benchmark rates, Bank Indonesia and the two foreign institutions agreed recently to standardize their three different rates, an executive of the central bank said recently. (hen)