Bank Indonesia Raises Reference Interest Rate By 25 Basis Points To 6 Percent

JAKARTA - Bank Indonesia (BI) raised the benchmark interest rate for the BI-7 Day Reverse Repo Rate (BI7DRR) by 25 basis points to 6 percent in the Board of Governors' Meeting (RDG) which took place on 18-19 October 2023.

In addition, the central bank also raised deposit facility interest rates and lending facility rates to 25 basis points each to 5.25 percent and 6.75 percent.

Previously, at the Board of Governors Meeting for the period September 2023, BI decided to hold the interest rate at 5.75 percent.

Meanwhile, the deposit facility interest rate is at the level of 5 percent, and the lending facility interest rate remains at 6.5 percent.

Just so you know, BI raised interest rates in January 2023 by 25 basis points from 5.5 percent to 5.75 percent.

"The meeting of the Board of Governors of Bank Indonesia on October 18 and 19, 2023 decided to raise the BI 7 Days Reverse Repo Rate by 25 basis points to 6 percent," said Bank Indonesia Governor Perry Warjiyo at a press conference, Thursday, October 19.

Perry said that the consideration of the interest rate increase was taken because this step was to strengthen the policy of stabilizing the rupiah exchange rate through intervention in the foreign exchange market and high global uncertainty, as well as a forward looking step to mitigate its impact on imported inflation inflation so that inflation remains under control in the target of 3 plus minus 1 percent in 2023 and 2.51 percent in 2024.

"The focus of BI's policy on strengthening the stability of the rupiah exchange rate to control imported goods and mitigate the impact of the global financial market uncertainty," he explained.