DBS Group Research Projects BI Will Lower Reference Interest Rates To 5.25 Percent By The End Of 2024

Photo: Doc. Antara

JAKARTA - DBS Group Research projects that Bank Indonesia (BI) will lower its benchmark interest rate by 75 basis points (bps) to reach the level of 5.25 percent by the end of 2024.

Senior Economist of DBS Bank lihat Rao estimates BI will lower its benchmark interest rate by 25 bps in the third quarter of 2024 and by 50 bps in the fourth quarter of 2024.

"BI, we expect (down) 75 bps, maybe 25 bps in the third quarter of 2024 and 50 bps in the fourth quarter of 2024", saidTEN in an event entitled Reviewing BI Policy, Supply of Bonds and Prospects of the Indonesian Economy 2024 in Jakarta, quoted from Antara, Wednesday, February 7.

was projecting the central bank of the United States (US) The Federal Reserve (The Fed) to lower its benchmark interest rate by 100 bps this year, with as many as 50 bps in the third quarter of 2024 and as many as 50 bps in the fourth quarter of 2024.

"Our expectations, in the second semester of 2024 the Fed will lower 100 bps. So, as many as 50 bps in the third quarter and 50 bps in the fourth quarter," said Shag.

On the same occasion, Equities Specialist DBS Group Research Maynard Arif said that in addition to lowering the benchmark interest rate, there are other options for BI as an effort to increase liquidity and help the Indonesian domestic economy.

"By lowering the Minimum Mandatory Giro (GWM), it can add liquidity and help the economy without lowering interest rates," said Maynard.

In the last BI Board of Governors Meeting (RDG) on January 16-17, 2024, BI decided to keep the BI-Rate at 6.00 percent, the Deposit Facility interest rate at 5.25 percent, and the Lending Facility interest rate at 6.75 percent.

"The decision to maintain BI-Rate at the level of 6.00 percent remains consistent with the focus of pro-stability monetary policy, namely to strengthen the stabilization of the Rupiah exchange rate as well as pre-emptive and forward looking steps to ensure inflation remains under control in the 2.5 plus minus 1 percent target by 2024," said BI Governor Perry Warjiyo.