Jakarta. Bank Indonesia has officially discontinued the publication of the Jakarta Interbank Offered Rate (JIBOR) as of Jan. 1, in an effort to strengthen the credibility and reliability of its rupiah benchmark interest rates.

The central bank is steering Indonesia’s financial markets toward the Indonesia Overnight Index Average (Indonia) as the primary reference rate. Unlike JIBOR, which was based on banks’ quoted rates, Indonia is calculated from actual interbank lending transactions in the money market, making it a more objective and market-reflective benchmark.

“With effect from Dec. 31, Bank Indonesia has stopped publishing JIBOR. Starting Jan. 1, 2026, we are fully using the Indonesia Overnight Index Average,” Arief Rachman, head of Bank Indonesia’s Financial Market Development Department, said during a media briefing in central Jakarta on Wednesday.

Bank Indonesia said the move is part of its broader benchmark reform agenda under the Money Market Development Blueprint 2030, particularly in improving pricing mechanisms in domestic financial markets. By relying on real transaction data, Indonia is seen as offering a more transparent and dependable reference for pricing financial instruments.

Arief said the transition is expected to help market participants conduct transactions at prices that better reflect actual liquidity conditions. “A benchmark formed from real market transactions provides a stronger foundation for pricing loans, securities, and other financial instruments,” he said.

The reform also aligns Indonesia with global benchmark reforms initiated by the G20 in the wake of the 2008 global financial crisis. As a G20 member, Indonesia has committed to replacing quote-based reference rates with transaction-based benchmarks to reduce manipulation risks and improve market integrity.

Looking ahead, Bank Indonesia aims to expand the use of Indonia beyond overnight tenors to non-overnight maturities of up to 12 months by 2030. The central bank said broader tenor coverage would further enhance pricing credibility across Indonesia’s financial markets.

Arief highlighted the key difference between the two benchmarks. JIBOR was an offered rate calculated using a simple average of bank quotes, while Indonia is derived from actual transactions and calculated using a weighted average. He stressed, however, that the way the benchmark is applied in financial contracts remains unchanged, with the distinction lying solely in the source of the price.

“The prices formed in the market — whether for credit or securities — become more credible because the benchmark itself is more credible and based on real transactions,” Arief said.

Bank Indonesia said the transition was carried out with extensive preparation, including ensuring market readiness. Indonia has been published alongside JIBOR since Aug. 1, 2018, allowing ample time for adjustment.

The decision to end JIBOR was first announced on Sept. 27, 2024, accompanied by a transition guide prepared by the National Working Group on Benchmark Reform, providing a roadmap for market participants to shift to the new reference rate.