Once Again, Bank Indonesia Maintains Reference Interest Rate At 3.5 Percent

JAKARTA - Bank Indonesia (BI) has decided to maintain the benchmark BI 7-Day Reverse Repo Rate at 3.50 percent. The same applies to the deposit facility interest rate which remains at 2.75 percent and the lending facility at 4.25 percent.

BI Governor Perry Warjiyo said this step was taken by considering efforts to stabilize the rupiah exchange rate. In addition, the central bank also pays attention to the low inflation forecast and efforts to support economic growth.

"Bank Indonesia will continue to optimize the policy mix to maintain macroeconomic and financial system stability and support further economic improvement efforts," he said in a virtual press conference after holding the Board of Governors' Meeting (RDG), Thursday, November 18.

Perry added, the monetary authority continues to push for a policy of transparency in the basic lending rate (SBDK) by deepening the analysis of the largest group of banks with a credit share of around 70 percent of the industry.

"Bank Indonesia also continues to facilitate the implementation of trade and investment promotions and continues to socialize the use of Local Currency Settlement (LCS) in collaboration with relevant agencies," he said.

To note, the benchmark interest rate level of 3.50 percent has been maintained by BI since last year after previously making gradual cuts of 150 basis points in six cuts.

"Bank Indonesia continues to strengthen policy synergies with the government and the Financial System Stability Committee (KSSK) in order to maintain the financial system stability and increase credit and financing to businesses in priority sectors to encourage economic growth, exports, and economic and financial inclusion," Perry said.