BI-Rate Remains At 6.25 Percent, Economist Says BI Needs To Intervene In Valas Market

Illustration. (Photo: Doc. Antara)

JAKARTA - Head of Bank Permata economist, Josua Pardede conveyed that Bank Indonesia (BI)'s decision to maintain the benchmark interest rate or BI Rate of 6.25 percent was in accordance with expectations.

"In accordance with the estimate that Bank Indonesia maintains the BI rate benchmark interest rate at the level of 6.25 percent taking into account that the policy interest rate is currently still consistently establishing inflation expectations and maintaining stability in the Rupiah exchange rate," he explained in his statement, Friday, June 21.

Josua said that considering that developments in the domestic financial market are currently influenced by sentiment factors from the global financial market, therefore the pressure on the Rupiah exchange rate and the domestic financial market is expected to tend temporarily.

In the future, Josua said that with Indonesia's relatively solid economic fundamental conditions, namely controlled inflation, external balance conditions were maintained.

Also, the prospect of solid economic growth, so the potential space for strengthening the Rupiah exchange rate and domestic financial markets will also be more open in the future.

"The short-term solution to rupiah's depreciation is that BI continues to intervene in the foreign exchange market," he said.

Josua said that for the medium term, BI needed to re-enact DHE's policies and continue to deepen Indonesia's financial markets.

Meanwhile, in the long term, Josua conveyed the need for export diversification so that commodities that tend to fluctuate do not tend to fluctuate, diversify export destinations so that they do not depend too much on the market of several countries.

And, he continued, diversifying imports so that import input needs decrease, increasing the role of the tourism industry as a source of foreign exchange revenue, and continuing to increase FDI's dependence on hot money or declining foreign portfolio investments.