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BI holds benchmark interest rate at 6 percent

Jakarta Globe - March 20, 2024

Arnoldus Kristianus, Jakarta – Bank Indonesia (BI) has opted to keep its benchmark interest rate, known as the BI Rate, unchanged at 6 percent, in line with analysts' projections.

"The decision to maintain the BI Rate at 6 percent underscores our commitment to pro-stability monetary policy. This aims to uphold the stability of the rupiah exchange rate and implement preemptive measures to ensure inflation remains controlled within the target range of 2.5 percent plus-or-minus 1 percent for 2024," BI Governor Perry Warjiyo said in Jakarta on Wednesday.

Additionally, BI has retained the deposit facility rate at 5.25 percent and the lending facility rate at 6.75 percent.

Warjiyo emphasized BI's consistent approach to macroprudential policies and payment systems, which prioritize growth to foster sustainable economic development. The central bank continues to pursue loose macroprudential policies to stimulate bank lending to both businesses and households. BI also endeavors to enhance payment system infrastructure and broaden access to digital payments.

"BI remains committed to a comprehensive mix of monetary, macroprudential, and payment system policies to uphold stability and foster sustainable economic growth," Warjiyo remarked.

Teuku Riefky, a macroeconomics and financial markets economist from the University of Indonesia, had anticipated BI's decision to maintain the benchmark interest rate at 6 percent.

He cited the relatively stable rupiah exchange rate in recent weeks, coupled with domestic inflation within BI's target range, as factors supporting this decision. Riefky emphasized that the current inflation and exchange rate conditions do not warrant an immediate adjustment to the benchmark interest rate.

Source: https://jakartaglobe.id/business/bi-holds-benchmark-interest-rate-at-6-percen