BI Rate Interest Rate Held at 6.25, Here’s Bank Indonesia’s Explanation – 2024-07-18 22:25:55

Governor of Bank Indonesia Perry Warjiyo (Antara)

Bank Indonesia (BI) Governor Perry Warjiyo explained the reasons for maintaining the BI Rate benchmark interest rate at 6.25%.

In a press conference on the results of the BI Board of Governors Meeting (RDG) in Jakarta, Wednesday (17/7), he explained that the decision was consistent with pro-stability monetary policy. It was a pre-emptive and forward-looking step to ensure that inflation remained under control within the target of 2.5% plus minus 1% in 2024 and 2025.

Similar to the BI-Rate, BI also maintained the deposit facility interest rate at 5.5 percent and the lending facility interest rate at 7%.

Perry said the focus of short-term monetary policy is directed at strengthening the effectiveness of stabilizing the Rupiah exchange rate and attracting foreign capital inflows.

Meanwhile, macroprudential policies and payment systems remain pro-growth to support sustainable economic growth.

“Loose macroprudential policies continue to be pursued to encourage bank credit/financing to businesses and households. Meanwhile, payment system policies are directed at strengthening the reliability of infrastructure and the structure of the payment system industry, as well as expanding acceptance of digitalization of the payment system,” Perry said in a press conference.

Read also: Russian Central Bank Raises Key Interest Rate to 16%

Perry ensured that BI would continue to strengthen the mix of monetary, macroprudential and payment system policies to maintain stability and support sustainable economic growth amidst the still high uncertainty of global financial markets.

This is done by strengthening the pro-market monetary operations strategy to increase the effectiveness of monetary policy in stabilizing the rupiah exchange rate, such as optimizing Bank Indonesia Rupiah Securities (SRBI), Bank Indonesia Foreign Currency Securities (SVBI), and Bank Indonesia Foreign Currency Sukuk (SUVBI).

Then, the central bank also strengthened the Rupiah exchange rate stabilization strategy through intervention in the foreign exchange market on transactions. spot, Domestic Non-Deliverable Forward (DNDF), and Government Securities (SBN) in the secondary market.

Finally, BI also strengthened innovation and acceptance of digital payment services as well as economic and financial inclusion of MSMEs, including consumer literacy and protection through the implementation of the Indonesian Digital Financial Economy Festival (FEKDI) x Indonesian Creative Works (KKI) 2024. (Ant/Z-11)