BI: Lowering Interest Rates Is Expected To Acquire Investment In West Sumatra

Illustration (Photo: Doc Antara)

JAKARTA - Bank Indonesia (BI) Representative of West Sumatra (West Sumatra) hopes that the decline in interest rates by 0.25 basis points will be able to spur massive investments in the country, including in the Minang area.

"One of the goals of lowering this interest rate is that BI wants to encourage and accelerate economic growth," said Head of Bank Indonesia West Sumatra Representative Mohamad Abdul Majid Ikram as reported by ANTARA, Tuesday, October 1.

The decline in Bank Indonesia policy interest rates, BI-Rate is expected to increase the level of consumption in the community, including efforts to provide signs to the business world to immediately invest.

With the decrease in interest rates, market prices will be more stable so that it is predicted to spur consumer purchasing power, and the demand for goods will increase.

Nationally, the decline or increase in interest rates will have an asymmetric impact. This means that if interest rates increase, the impact will be around three quarters. On the other hand, if interest rates go down, the impact will be a little slower to the economy, which ranges from three to four quarters.

In general, Majid explained, a decline in terms of 0.25 basis points can only be felt in the 2025 period, especially in the consumption sector.

Nevertheless, BI emphasized that the decline in interest rates indicates that the economy in the country is improving.

"So, we are giving a signal to business actors that the Indonesian economy is doing well," he said.

Finally, he is optimistic that the decline in BI interest rates can spur and attract investors to Indonesia, including investing in the Minang realm.

Additional information from Bank Indonesia has lowered the benchmark interest rate or BI-Rate by 25 bps to 6 percent.

The deposit facility interest rate and lending facility rate also fell by 25 bps to 5.25 percent and 6.75 percent, respectively.