Four Times In A Row! BI Maintains Reference Interest Rate Of 5.75 Percent

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) made the decision to maintain the benchmark 7-Day Reverse Repo Rate (BI7DRR) at 5.75 percent.

BI Governor Perry Warjiyo said that the same provisions also apply to the deposit facility interest rate which does not change by 5 percent and the lending facility interest rate by 6.50 percent.

"The decision to maintain BI7DRR by 5.75 percent is consistent with the monetary policy stance to ensure core inflation is controlled in the range of 3 percent plus minus 1 percent in the remainder of 2023," he said in Jakarta at the age of the Board of Governors' Meeting, Thursday, May 25.

According to Perry, the central bank is targeting the Consumer Price Index (JCI) inflation to return to the target range of 3 percent plus minus 1 percent in the third quarter of 2023.

"The policy focus is directed at strengthening the stabilization of the rupiah value to control imported goods inflation (imported inflation) and mitigate the impact of the global financial market uncertainty," he said.

Perry said, also if the liquidity and macroprudential policies were loose, they would continue to encourage lending/financing and maintain financial system stability.

The acceleration of digitalization of payment systems continues to be encouraged for the expansion of the digital economy and finance and strengthening the stability of payment systems and services.

"The flow of monetary, macroprudential, and payment systems continues to be directed to support sustainable economic growth," he stressed.

For information, the move by the monetary authority which does not shift the BI rate is the fourth time since the beginning of this year.

Previously, Bank Indonesia had aggressively raised interest rates since mid-2022 in order to reduce the inflation rate which had exceeded the government's target.