Core Inflation Under Control, BI Holds Rates

According to the latest data from Statistics Indonesia (BPS), the headline inflation in June 2022 was 0.61 percent, a slight increase from 0.40 percent in May 2022.

KOMPAS/DIAN DEWI PURNAMASARI

The atmosphere of a stall for basic household necessities at a traditional market in Jakarta, amid the symptoms of inflation in recent weeks.

JAKARTA, KOMPAS — Bank Indonesia (BI) has decided to keep the benchmark interest rate steady despite the rise in inflation and the weakening of the rupiah. The central bank says there is no need to raise the interest rate because it believes core inflation is still under control. BI will maximize its policy mix and monetary operations to maintain exchange rate stability.

The BI board of governors meeting on 20-21 July decided to maintain the BI 7-Day Reverse Repo Rate (BI7DRR) at 3.5 percent, the deposit facility interest rate at 2.75 percent and the lending facility interest rate at 4.25 percent.