Bank Indonesia Projected To Hold Reference Interest Rate 6.25 Percent

Bank Indonesia (Photo: antara)

JAKARTA - Head of Bank Permata economist, Josua Pardede, projects that BI will hold the benchmark interest rate taking into account inflationary conditions that remain under control, as well as foreign exchange reserves and the prospect of external balance that can still be managed.

"BI is expected to maintain the BI rate benchmark interest rate at the level of 6.25 percent in the RDG in June considering that the benchmark interest rate at the level of 6.25 percent is still consistent to increase inflation expectations and maintain the stability of the rupiah exchange rate," he explained in his statement, Thursday, June 20.

According to Josua in recent weeks, the strengthening of the US dollar against global currencies is influenced by sentiment factors such as the weakening of the Euros amid political uncertainty in Europe.

Josua added that as well as the direction of the global central interest rate, especially the Fed, where at the FOMC meeting in June 2024, the Fed is expected to have room to cut the FFR interest rate by 25bps in 2024 and the FFR reduction room by 100bps in 2025.

Josua said that the weakening of the Rupiah and other global currencies was influenced by sentiment factors and did not reflect the fundamental factors of the Indonesian economy, Josua stated that the current weakening of the Rupiah tends to be temporary.

"Therefore, BI is expected to again maintain the BI rate at the level of 6.25 percent after BI last raised the BI benchmark interest rate in RDG last April," he said.