Unchanged Reference Interest Rate, Bank Indonesia Maintains BI Rate 5.75 Percent

Governor of Bank Indonesia Perry Warjiyo. (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) decided to maintain the BI 7-Day Reverse Repo Rate (BI7DRR) at 5.75 percent.

The same applies to deposit facility interest rates and lending facility rates of 5.00 percent and 6.50 percent, respectively.

"The decision to maintain the BI 7-Day Reverse Repo Rate by 5.75 percent is consistent with the remaining controlled inflation policy stance," said BI Governor Perry Warjiyo in a press conference held today, Thursday, August 24.

Perry explained that the inflation target for the rest of this year is 3 percent plus minus 1 percent and 2.5 percent plus minus 1 percent in the 2024 period.

"The focus of monetary policy is directed at strengthening the stabilization of the rupiah exchange rate to mitigate the impact of global financial market uncertainty," he said.

Meanwhile, to support the domestic economy, Perry revealed that loose macroprodential policies are directed to strengthen the effectiveness of providing liquidity incentives to banks.

"This is useful for encouraging financing loans with a focus of downstreaming, housing, tourism, and inclusive and green financing," he said.

Furthermore, Perry explained, the acceleration of the payment system continues to be encouraged for the expansion of digital economic and financial inclusion.

He said, strengthening the mix of monetary, macroprudential, and payment systems of Bank Indonesia continues to be directed to maintain stability and support sustainable economic growth.

"Bank Indonesia will strengthen the policy mix's response to maintaining stability and encouraging growth," said Perry.

To note, the benchmark interest rate of 5.75 percent has been around since January 2025.

At that time, the central bank raised the BI rate by 25 basis points (bps).

Meanwhile, BI's decision to maintain this interest rate is in line with the level of domestic inflation which is increasingly under control.