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Bank Indonesia maintains benchmark interest rate at 6%

Jakarta Globe - February 21, 2024

Faisal Maliki Baskoro, Jakarta – Bank Indonesia (BI) decided to keep the benchmark interest rate at 6 percent during the Board of Governors Meeting on Feb. 20-21, 2024, maintaining the rate since October.

Meanwhile, the deposit facility interest rate remains at 5.25 percent, and the lending facility interest rate stays at 6.75 percent.

"The decision to maintain the BI Rate is consistent with the pro-stability monetary policy focus, aiming for the strengthening of the rupiah exchange rate. It also reflects pre-emptive and forward-looking measures to ensure controlled inflation within the target range of 2.5 plus-minus 1 percent in 2024," Governor of Bank Indonesia, Perry Warjiyo, said on Wednesday.

The central bank anticipates a rise in global economic growth despite ongoing financial market uncertainty. The global economy is expected to expand by 3.1 percent in 2023 and 3 percent in 2024, surpassing the initial projections of 3 percent and 2.8 percent, respectively.

This positive trend is mainly attributed to the robust performance of the United States and India. However, China's sluggish economic growth and the consecutive contraction of economic growth in the United Kingdom and Japan may pose challenges to the global economic outlook.

"The Fed Funds Rate (FFR) is expected to start declining in the second half of 2024, in line with persistently high inflation in the US," Perry stated.

Bank Indonesia forecasts economic growth in 2024 to range between 4.7 percent and 5.5 percent, following the 5.05 percent growth recorded in 2023. This outlook is influenced by the improvement in exports, in line with global economic growth, and strong domestic demand.

Source: https://jakartaglobe.id/business/bank-indonesia-maintains-benchmark-interest-rate-at-