BI Boss Reveals Possibility of Lowering Interest Rates in Semester II-2024

Governor of Bank Indonesia (BI) Perry Warjiyo. Photo: Doc. Antara

JAKARTA - Bank Indonesia (BI) Governor Perry Warjiyo said there would be a possibility of lowering the benchmark interest rate in the second semester of 2024 in line with BI's efforts to strengthen the monetary policy mix, maintain the stability of the rupiah exchange rate, and encourage economic growth.

"We will continue to strengthen the monetary policy mix, while looking at gaps in the second semester, whether there is room to reduce interest rates, to stabilize the rupiah exchange rate," said Perry at the launch of the 2023 Indonesian Economic Report, Wednesday, January 31, 2024.

According to Perry, the possibility of lowering interest rates is in line with his estimates that there is a possibility that the United States central bank, namely the Federal Reserve, will begin to lower the benchmark interest rate in the second semester of 2024.

"We estimate the Fed Fund Rate for the second semester, but it will clearly go down, God willing, at least it will subside. The dollar is still strong, but after the Fed Fund Rate goes down, of course it will subside," he explained.

For information, Bank Indonesia has maintained the BI Rate benchmark interest rate at 6 percent for four consecutive months from October 2023 to January 2024.

Previously, the benchmark interest rate increased from September 2023 by 5.75 percent. The reference interest rate at this level has also been maintained since BI held it starting January 2023.

Furthermore, the benchmark interest rate continues to rise from 3.5 percent in July 2022 to 3.75 percent in August 2022 and in September 2022 to 4.25 percent and again increases in October 2022 to 4.75 percent and in November 2022 5, 25 percent and in December 2022 at the level of 5.5 percent.