Gapmmi Hopes BI Rate Remains 6.25 Percent By The End Of This Year

Bank Indonesia (Photo: Antara)

JAKARTA - The Association of Indonesian Food and Beverage Producers (Gapmmi) hopes that the benchmark interest rate or BI Rate will remain at the level of 6.25 percent until the end of 2024 in order to ease the burden on the industry, which is currently struggling with various challenges.

General Chairperson of Gapmmi Adhi S. Lukman said the food and beverage industry is currently facing challenges, such as an increase in logistics and capital costs.

Adhi explained that most food and beverage industries have bank loans, an average of around 70 percent. The increase in bank interest will automatically increase costs amid soaring logistics costs.

According to him, the increase in logistics costs in several countries has now reached three times and has difficulty getting containers. This forces the industry to increase their supply, which of course requires more capital.

"In the past, it was enough to stock for two weeks. Now it has to be one month, there are even certain incentives (raw materials) that have to be in stock for two months. Well, this stock, right, requires capital. If the interest is higher, the capital costs will automatically be more expensive," said Adhi to reporters, quoted on Tuesday, July 23.

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.