Bank Indonesia Maintains Reference Interest Rate Of 5.75 Percent In September 2023

JAKARTA Bank Indonesia (BI) has taken a stand to maintain the BI 7-Day Reverse Repo Rate (BI7DRR) at 5.75 percent.

BI Governor Perry Warjiyo said the same policy was also applied to deposit facilities and lending facility interest rates, which remained at 5.00 percent and 6.50 percent, respectively.

"This decision is a consistency of monetary policy to ensure inflation remains low and under control in the target range of 3 percent plus minus 1 percent in 2023 and 2.5 percent plus minus 1 percent in 2024," he said at a press conference in Jakarta, Thursday, September 21.

Perry explained that monetary policy remains focused on controlling the stability of the rupiah exchange rate as an anticipatory measure of the impact of the global financial market uncertainty.

Meanwhile, loose macroprudential policies continue to be pursued to encourage bank credit/financing to the business world.

"This is done through a macroprudential liquidity incentive policy with a focus on downstreaming, housing, tourism, and inclusive and green financing, which is effective from October 1, 2023," he said

Likewise, the digitization of the payment system called Perry will be further accelerated to expand the inclusion of the digital economy and finance.

"Including digitizing financial transactions for the central and regional governments," he asserted.

The editor noted that the interest rate last rose in January 2023 from 3.50 percent to 5.75 percent. Previously, BI had continued to raise interest rates since August 2022, which at that time was still 3.50 percent.