JAKARTA The phenomenon of increasing the central bank's benchmark interest rate in a number of world countries since 2022 is believed to have almost reached the peak limit entering the first half of 2023.
Bank Mandiri Treasury & International Banking Director Panji Irawan revealed that the interest rate increase is actually aimed at controlling the inflation rate, which is currently perched at the top level.
"If we look at interest rates in 2022, the Fed (US central bank) continues to increase it, this year it may only be once or twice (the increase)," he told reporters during a press conference on Tuesday, January 24.
For information, the provisions of the Fed Fund Rate are an important reference for the central bank of the world to remain relevant to the policy of the issue bond and also the stability of the exchange rate.
Furthermore, Panji also saw the same thing in Bank Indonesia which had sent a signal only once to raise the benchmark interest rate in mid-January.
"This reflects because of the recession, then it is no longer (the policy chosen) to hit with anti-inflation moves. Because, so far, what we know about the anti-inflation move is by raising interest rates," he said.
"If there is a recession like this, the interest rate may continue to flat and will start to fall in the fourth quarter," he said.
VOI noted that last week the monetary authority of Bank Indonesia had just raised the BI rate by 25 basis points (bps) to the level of 5.75 percent. At that time, BI Governor Perry Warjiyo said that this step was a follow-up action to front-loaded, pre-emptive, and forward looking ensure that inflation and inflation continued to decline in expectations in the future.
"The decision to increase interest rates is more measurable," he said.
Perry targets the core inflation rate to remain in the range of 3 percent plus minus 1 percent in the first semester of 2023. Meanwhile, inflation of the Consumer Price Index (CPI) returns to its target of 3 percent plus minus 1 percent in the second semester of 2023.
Meanwhile, the BI interest rate increase itself has been going on in a row since August 2022 with a total of 225 bps.
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