BI Maintains Reference Interest Rate At 3.5 Percent, JCI Potential Returns To Level 7,000

Illustration. (Photo: Doc. Antara)

JAKARTA - The results of the meeting of the Board of Governors (RDG) of Bank Indonesia (BI) in May still maintain the BI 7-Day Reverse Repo Rate (BI7DRR) benchmark interest rate at 3.5 percent. Market participants responded to this policy, and this would make the Composite Stock Price Index (IHSG) potentially penetrate the 7,000 level again.

Associate Director of Research and Investment Pilarmas Investindo Sekuritas Maximilianus Nico Demus assessed that BI's view and attitude towards the current economic conditions gave market participants peace of mind. In addition, the growth of banking credit and Micro, Small, and Medium Enterprises (MSME) loans in April 2022 shows Indonesia's economic fundamentals are recovering in a strong and sustainable manner.

"This is a provision to face market uncertainty. It provides comfort for market players to be able to continue their investment in Indonesia. Even though Indonesia's economic fundamentals are strong, it does not necessarily erase the uncertainty that exists in the market," Nico said in his research.

Nico said the JCI has a large enough potential to return to the level of 7,000. However, of course, there will still be volatility, so there is also ample room for the JCI to fluctuate before eventually strengthening to the level of 7,000.

For information, after turning red on Monday's trading, the JCI last Tuesday, May 24, moved in the green zone throughout trading and closed higher by 73.36 points or 1.07 percent to 6,914.14.