BI Prediction Economists Maintain Reference Interest Rates At Level 6 Percent

JAKARTA - Senior economist and Associate Faculty of the Indonesian Banking Development Institute (LPPI) Ryan Kiryanto estimates that Bank Indonesia (BI) will again maintain BI-rate at the level of 6 percent at the Board of Governors Meeting in November 2024.

Ryan said that taking into account the development of the rupiah, which is still under intense pressure at Rp15,900 per US dollar after Donald Trump's victory as US President, had an impact on new discomfort in the international world and the Fed's move to find it difficult to lower the benchmark interest rate (FFR).

"The best choice for the BI RDG this time is to keep the BI Rate at the level of 6 percent even though domestic inflation is actually under control and the economy is in need of a stimulus for easing monetary policy," he said in his statement, Wednesday, November 20.

According to Ryan, with BI's more pro-stability policy move, the rational option is that BI continues its steps to keep the BI Rate at 6 percent.

Therefore, Ryan said that in the future BI has sufficient space to reduce the BI Rate to a minimum of 25 bps with the condition that the rupiah strengthens and is stable in the range of Rp. 15,300 per US dollar, inflation is maintained in the range of 2.5 percent and domestic political stability is maintained.

However, Ryan said that if BI lowers the BI Rate to 5.75 percent, then BI's space to reduce the BI Rate again in the following months will be even more limited.

"If even this time RDG BI lowered the BI Rate to 5.75 percent, then BI's space to reduce the BI Rate again in the following months will be increasingly limited. In my opinion, the current priority is pro-stability over growth," he said.