JAKARTA - Bank Indonesia (BI) decided to raise the benchmark interest rate by 25 basis points (bps) to 3.75 percent. The same applies to the deposit facility interest rate from 2.75 percent to 3.00 percent and the lending facility from 4.25 percent to 4.50 percent.
BI Governor Perry Warjiyo said the central bank's move was based on preventive and forward looking steps to mitigate the risk of rising core inflation and inflation expectations due to rising prices for non-subsidized fuel oil (BBM) and inflation due to volatility in food prices.
"This is also an effort to strengthen the stability of the rupiah exchange rate so that it is in line with its fundamental value in line with the high uncertainty in global financial markets amid increasingly strong domestic economic growth," he said through a digital channel when giving a statement to the media crew on Tuesday, August 23.
According to Perry, BI also continues to implement a strategy to strengthen the policy mix to maintain national economic stability.
"Bank Indonesia will continue to carry out monetary operations by increasing the interest rate structure on the money market in accordance with the increase in the BI benchmark interest rate," he said.
For information, Bank Indonesia's stance on raising the BI rate this time is the first in the pandemic era after the central bank previously set the lowest interest rate policy in history at 3.50 percent since 2020.
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