Bank Indonesia holds benchmark interest rate at 3.5 pct

Jakarta (Indonesia Window) – The Board of Governors Meeting of Bank Indonesia (BI) on June 22-23, 2022, decided to maintain the benchmark interest rate at 3.50 percent, the deposit facility rate at 2.75 percent, and the lending facility rate by 4.25 percent.

This decision is in line with the need to control inflation and maintain exchange rate stability, as well as continue to support economic growth, amidst rising external pressures related to the increasing risk of stagflation in various countries, BI Governor Perry Warjiyo told a press conference on Thursday.

In the future, global economic uncertainty is predicted to remain high in line with the increasing risk of slowing economic growth and rising global inflation, among others as a result of the increasingly widespread protectionism policies, especially on food, which are made by various countries, Perry noted.

To that end, the central bank continues to take various steps, including strengthening the rupiah exchange rate policy in order to maintain exchange rate stability and support inflation control while still paying attention to the operation of market mechanisms and their fundamental values.

BI also accelerated the normalization of the liquidity policy by increasing the effectiveness of the implementation of the increase in the statutory reserves and Rupiah Monetary Operations, he said, adding that the central bank was also continuing the policy of transparency of the basic loan interest rate (BLIR) by deepening the overhead BLIR component.

In addition, BI also continued the validity period of the BI National Clearing System tariff policy of 1 rupiah (0,000067 dollar) from Bank Indonesia to banks and a maximum of 2,900 rupiahs (0,20 dollars) from banks to customers, from the original ending on June 30, 2022 to December 31, 2022 in order to improve cost efficiency. and community economic activities as well as facilitating financial transactions in order to support economic recovery.

The Indonesian central bank also strengthens international policies by expanding cross-border payment connectivity cooperation, facilitating the implementation of investment and trade promotion in priority sectors in collaboration with relevant agencies, and with the Ministry of Finance to succeed the six priority agendas of the financial line of the Indonesian Presidency at the G20 in 2022.

Reporting by Indonesia Window