Bank Indonesia Raises Interest Rate to 6.25 Percent
BI's steps are to maintain the rupiah exchange rate.
REPUBLIKA.CO.ID, JAKARTA -- The results of the Board of Governors Meeting (RDG) decided that Bank Indonesia (BI) would increase its benchmark interest rate by 25 basis points (bps).
BI's benchmark interest rate is now 6.25 percent from the previous 6.00 percent. BI also raised the deposit facility interest rate by 25 basis points to 5.50 percent. The lending facility interest rate also increased by 25 basis points to 7.00 percent.
This increase is the first this year. BI raised interest rates in October last year.
BI Governor Perry Warjiyo said the increase in the benchmark interest rate was carried out to strengthen the stability of the rupiah exchange rate. "This is to strengthen the policy of stabilizing the rupiah exchange rate from the impact of increasing global uncertainty," said Perry in a virtual press conference, Wednesday (April 24, 2024).
Perry continued, that this is a pre-emptive step to ensure that inflation remains within the target of 2.5 percent plus or minus one percent in 2024. BI hopes that inflation will also remain under control until 2025, which is in line with pro-stability monetary policy.
Macroprudential policies and payment systems will continue to grow. The digital acceleration of payment systems will also be strengthened to expand the reliability of the infrastructure and structure of the payment system industry.
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