Indonesian Bank to Maintain Benchmark Rate at 6% and Implements Mix-Policy
Governor of Bank Indonesia Perry Warjiyo - Photo: Privacy

JAKARTA (TheInsiderStories)Bank Indonesia (BI) decided to keep the benchmark 7-Day Reverse Repo Rate (DRR) at 6 percent, based on the latest economic conditions, said senior officer today.

Governor of BI Perry Warjiyo said that the decisions taken were consistent with efforts to strengthen external stability, especially controlling the current account deficit to safe limits and maintaining the attractiveness of the domestic financial market.

It also pays attention to global and domestic economic conditions. Globally, there is reduced uncertainty in the financial markets due to the policies of a number of central banks that are not as stringent as previous estimates which have a positive impact on foreign capital inflows to developing countries including Indonesia.

On the other hand, BI also monitors the symptoms of economic slowdown in various countries such as the United States, Europe, and China. “This gives a challenge to push exports forward,” he said in Jakarta today (3/21).

Interest rate policy is still focused on maintaining stability. However, it does not mean that BI is ignorant of the role to encourage economic growth through macroprudential policies and the payment system.

“The policy mix is ​​strengthened to support domestic demand and encourage economic growth,” he said.

BI mentioned, about some of those economic mix-policy which are to increase liquidity availability through regular and scheduled term-repo transactions, strengthening accommodative macroprudential policies by increasing the range of Macroprudential Intermediation Ratios from 80-92 percent to 84-94 percent to support bank financing for the business world, accelerating financial market deepening policies.

Furthermore, BI also strengthens payment system policies to support inclusive economic and financial activities, the economic ecosystem of digital finance.

In coordination with the Government and related authorities, BI also continues to be strengthened to maintain economic stability, particularly in controlling inflation and the current account deficit, and maintaining the momentum of future economic growth, particularly in boosting domestic demand and maintaining external stability by encouraging exports, tourism and foreign capital flows.

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