BI Revised Down Indonesia's GDP from 5.0 - 5.2 percent to 4.2 - 4.6 percent and in 2021 around 5.2 - 5.6 percent - Photo by BI OFfice

JAKARTA (TheinsiderStories) – Bank Indonesia cut its seven day reverse repo rate (BI-7DRR) by 25 basis points to from last month 4.75 percent, said the governor today (02/20). The policymakers also reduce the deposit facility interest rate and lending facility rate by 25 basis points to 3.75 percent and 5.25 percent, respectively.

BI’ Governor Perry Warjiyo said in a video conference today (03/19) the decision has been take to curb the domestic economy from COVID-19 outbreak. Amid the pandemic, the central bank revised down global economic growth to 2.3 percent with risks downward. In 2021 the global economy will increase 3.7 percent from the initial estimate of 3.4 percent.

The policymaker also cuts Indonesian GDP from 5.0 – 5.2 percent to 4.2 – 4.6 percent and in 2021 5.2 – 5.6 percent will be driven by the fiscal side, improvement of the investment climate and BI effort. While, current account deficit 2020 and 2021 are respectively in the range of 2.2 – 2.5 percent of GDP.

Inflation is estimating stood at 2.98 percent year on year from January 2020 at 2.6 percent. The Rupiah, he continued, has appreciated 8.77 percent since early 2020. He assured, Bi will continues to strengthen the exchange rate and intensify the value of the Rupiah through triple intervention.

Bank loans growth is estimating 6 – 8 percent, inline with GDP growth in 2020, from initial targets 9 – 10 percent.

“In the future, we will continue to coordinate very closely with the ministry of finance, FSA (Financial Service Agency), and IDC (Indonesia Deposit Insurance) in mitigating the impact of COVID-19 on the financial system,” said the governor.

He continued, “BI will continue to provide a confirmation to the market that we will always prepare steps to reduce the impact of this pandemic.”

The central bank also promised will hold an update regularly. He conveyed, “We schedule every Tuesday and Thursday at 14.00 p.m for domestic investors and for global investors today.”

Today, Indonesian Rupiah has dropped 4.28 percent to 15,850 against the US Dollar and the Jakarta Composite Index dropped 5.04 percent to 4,094.78 compared to previous day.

Written by Staff Editor, Emai: theinsiderstories@gmail.com