REPUBLIKA.CO.ID, JAKARTA -- The Bank Indonesia's benchmark interest rate is maintained at the level of 3.5 percent on April. The Board of Governors Meeting (RDG) of Bank Indonesia on 19-20 April 2021 decided to maintain the BI 7-day Reverse Repo Rate (BI7DRR) at 3.5 percent.

The Deposit Facility interest rate is also fixed at 2.75 percent and the Lending Facility rate is at the same figure, 4.25 percent.

"After seeing various assessments on various matters, the RDG 19-20 April 2021 decided to maintain the BI 7DRRR at 3.5 percent," said the Governor of Bank Indonesia, Perry Warjiyo, in a virtual press conference, Tuesday (20/4).

BI believes this decision is in line with the need to maintain rupiah exchange rate stability from the impact of high global market uncertainty. BI admits the inflation rate and target is still low.

To support sustainable national economic recovery, BI will optimize the monetary and macroprudential policy mix and accelerate the digitalization of the payment system.

On the money market, loose liquidity and a 150 bps drop in the BI7DRR since 2020, pushed the average overnight interbank rate to around 2.79% during March 2021.

In the banking sector, in line with the implementation of the interest rate transparency policy, banks have responded by lowering the prime lending rate (SBDK) as of February 2021 by 171 bps (yoy).

The decline in prime lending rates mainly occurred for state-owned banks, which fell 266 bps (yoy) to 8.70%, higher than the decline in prime lending rates for other bank groups. The decline in prime lending rates occurred in all types of credit, with the deepest decline in micro credit at 346 bps (yoy), although it was still the type of credit with the highest prime lending rate at 12.72%.