Raising Interest Rates, BI Steps on the Brakes Early

Bank Indonesia has decided to raise interest rates early as a preemptive measure to cope with inflation in the event of an increase in fuel and food prices.

KOMPAS/ELSA EMIRIA LEBA

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JAKARTA, KOMPAS — Although the core inflation and the rupiah exchange rate have so far been relatively in check, Bank Indonesia( BI) has decided to increase its benchmark rate.

During its board of governors’ meeting on Tuesday, BI raised its benchmark interest rate by 25 basis points to 3.75 percent. The policy is seen as a preemptive measure to cope with future inflation, which may occur in the event of an increase in fuel and food prices.