Central Bank For The Naikan Suku Bunga Berjamah, 2023 Dunia Terpastikan Bakal Resesi

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - A number of central banks are known to be increasingly aggressive in raising interest rates to control domestic inflation and protecting their respective currency exchange rates.

One of the most surprising occurred last week when the US central bank, The Federal Reserve (The Fed), raised interest rates by 75 basis points (bps) to stem inflation which had reached 8.3 percent yoy in August 2022.

A few hours later, Bank Indonesia (BI) responded to this by raising the 50 bps benchmark interest rate to 4.25 percent.

This condition was responded to by the Minister of Finance (Menkeu) Sri Mulyani as one of the strategic steps in keeping the economy stable.

"The high global inflation pressure has prompted an increase in interest rates in many countries and has the potential to increase cost of funds and stricter liquidity," he said when giving an explanation to reporters, quoted on Tuesday, September 27.

The Minister of Finance gave an example, the British central bank has recorded an increase in the rate of up to 200 bps this year to 2.25 percent.

Then Brazil 450 bps to 13.75 percent, India raised the interest rate of 140 pbs to 5.40 percent, and European countries raised 125 bps to 1.25 percent. Meanwhile, Indonesia through BI is known to have only increased 75 bps since the beginning of the year to 4.25 percent.

This is a trend that will definitely have an impact on the performance of economic growth. The World Bank some time ago said that if all central banks raised interest rates quite extremely and together, the world would definitely experience a recession in 2023," he said.

"Therefore, the government will continue to take anticipatory steps regarding the performance of the global economy which will weaken due to high inflation and rising interest rates," said Minister of Finance Sri Mulyani.