Bank Indonesia (BI), the country's central bank, is responsible for formulating monetary policy and supervising payment and banking systems.

BI also has specific licensing procedures for organizations structured on shari'a principles. They include recognizing the supervisory authority of the National Shari'a Board, which is a council established by the Indonesian Ulama Council that is authorized to issue fatwas (Islamic rulings) concerning products, services, and operations of shari’a-based financial institutions.

The Capital Market and Financial Institution Supervisory Board (BAPEPAM-LK), under the Ministry of Finance (MOF), is responsible for granting licenses, setting rules and regulations, supervising market participants, and establishing capital market accounting standards. The Indonesia Stock Exchange (IDX) has statutory reporting requirements for all listed companies.

Pricing Stability

Bank Indonesia (BI) uses inflation targeting as a part of its monetary policy, with interest rates serving as an effective tool for balancing growth and prices. BI launched an Inflation Targeting Framework in July 2005 to achieve its primary goal of stabilizing the rupiah. The framework contains measures to improve effectiveness and governance in monetary policy. It also sets the BI rate as the reference rate in monetary control. BI's inflation target range for 2010 is 4%–6%.

BI’s Board of Governors conducts monthly reviews of its monetary policy. A copy of BI's monetary policy review can be found by following the link provided below.

Financial Stability

On 30 December 2005, the Financial System Stability Forum (FSSF) was established through a joint decree of the Ministry of Finance (MOF), Indonesia Deposit Insurance Corporation, and BI. The FSSF serves as a venue for coordination, cooperation, and information exchange to ensure financial stability in Indonesia.

A link to the FSSF website is provided below. More details on the FSSF, including its role in safeguarding financial stability, are available on BI website.

Banking Operations

The overall policy directions and strategy of BI for 2010 include:

• strengthening the resilience of the banking system;
• strengthening of banking mediation;
• increasing the role of shari'a banking; and 
• enhancing the role of rural bank.

BI’s Banking Booklet provides more detailed information on Indonesia's banking operations. BI also prepares an annual series of policy actions for the banking sector. Annual versions of the Banking Booklet can be found at the link provided below.

The Capital Market and Financial Institution Supervisory Board (BAPEPAM-LK), under the Ministry of Finance (MOF), is responsible for granting licenses, setting rules and regulations, supervising market participants, and establishing capital market accounting standards. (The former BAPEPAM was merged with one unit of Direktorat Jenderal Lembaga Keuangan in December 2005 to become BAPEPAM-LK.) BAPEPAM-LK also collects reports from market participants, including those of both issuers and securities companies. Reporting requirements vary between issuers and securities companies, but in general both include daily and monthly activity report, and six-month and annual financial reports. Securities companies must also report their daily-adjusted working capital.

BAPEPAM-LK is responsible for the registration of corporate debt instruments. Corporate issues must be rated by Credit Rating Indonesia (PEFINDO). Audited financial statements and legal audit reports are required to receive a credit rating.