Knock! Bank Indonesia Closes 2021 With Fixed Interest Rates At 3.50 Percent Level

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) has decided that the benchmark BI 7-Day Reverse Repo Rate (BI7DRR) will remain at a low level of 3.50 percent based on the results of the Board of Governors' Meeting (RDG) for the December 2021 period.

BI Governor Perry Warjiyo said that the deposit facility interest rate also did not move from the level of 2.75 percent and the lending facility rate of 4.25 percent.

To note, the interest rate level of 3.50 percent is the lowest in history. BI itself has maintained this interest rate for a long time, since last year after previously making gradual cuts of 150 basis points in six declines.

"This decision is in line with the need to maintain exchange rate stability and the financial system, amid low inflation forecasts and efforts to support economic growth," he said in a virtual press conference, Thursday, December 16.

According to Perry, Bank Indonesia will also continue to optimize the entire policy mix to maintain macroeconomic and financial system stability and support further economic improvement efforts.

"Monetary policy in 2022 will be more directed at maintaining stability, while macroprudential policies, payment systems, deepening of the money market, as well as inclusive and green finance-economics, will continue to encourage economic growth," he said.

Perry added that his party will continue the rupiah exchange rate policy to maintain exchange rate stability in line with market fundamentals and mechanisms. Then, the central bank also continued to strengthen its monetary operations strategy to strengthen the effectiveness of the accommodative monetary policy stance.

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