BI Fixed Rate 6.25 Percent, Gapmmi Boss: No Additional Industrial Burden

Chairman of the Association of Indonesian Beverage Food Producers Adhi S Lukman. (Photo: Theresia Agatha/VOI)

JAKARTA - The Association of Indonesian Beverage Producers (Gapmmi) appreciates the steps taken by Bank Indonesia (BI) which decided to maintain the benchmark interest rate or BI Rate of 6.25 percent.

General Chairperson of Gapmmi Adhi S. Lukman said BI's decision to maintain the benchmark interest rate would not add to the burden on the industry.

Given, he continued, most of the industrial sectors rely on loans from banks.

"Most of the industries have bank loans, an average of around 70 percent. If bank interest continues to rise, automatically, right, costs increase," said Adhi when met at Artotel Gelora Senayan, Jakarta, Monday, July 22.

Adhi also did not deny that currently, logistics costs are increasing.

In fact, there are several countries whose logistics costs have tripled. It is also feared that this will increase the burden on the industrial sector.

"Automatically, the industry must increase its inventory (inventory items). In the past, the stock was sufficient for two weeks, now it has to be one month. In fact, there are certain incentives (raw materials) that have to be in stock for two months," he said.

Thus, said Adhi, entrepreneurs also need quite a lot of capital.

According to him, if interest rates are raised, it will be feared that the capital costs will be more expensive.

"This stock, right, requires capital. If the interest is higher, the capital costs will automatically be more expensive," said Adhi.

He hopes that the benchmark interest rate in the fourth quarter will not increase or remain in the range of 6.25 percent.

"We hope to stay, don't go up again," he concluded.

Previously, Bank Indonesia (BI) decided to maintain the benchmark interest rate or BI Rate at 6.25 percent. In addition, BI also maintains the deposit facility interest rate and lending facility interest rate, at 5.50 percent and 7.0 percent, respectively.

BI Governor Perry Warjiyo said the decision to maintain the benchmark interest rate at the level of 6.25 percent was a pro-stability step in monetary consistency.

"The Meeting of the Board of Governors (RDG) of Bank Indonesia on July 16-17, 2024 decided to keep the BI-Rate at 6.25 percent," Perry said at a press conference, Wednesday, July 17.