Bank Indonesia Stops Interest Rate Increase

BI will continue to anticipate the impact of the monetary tightening policy in the US by maintaining the stability of the rupiah exchange rate so that the imported inflation will not affect the domestic economy.

KOMPAS/PRIYOMBODO

An officer checks the physical condition of US dollar bills exchanged by customers at the foreign exchange exchange at Valuta Inti Prima in Cikini, Central Jakarta, Tuesday (3/1/2023).

JAKARTA, KOMPAS — Bank Indonesia (BI) has finally stopped the trend of increasing benchmark interest rates which has been going on for six months. This was marked by BI's move to hold the benchmark interest rate at 5.75 percent on Thursday. With the improved global and domestic economic conditions, the central bank is confident that the current benchmark interest rate is still sufficient to control future inflationary pressures.

Previously, due to the global economic uncertainty and its impact on domestic inflation pressures, the central bank persistently increased the BI-7 Day Reverse Repo Rate (BI7DRR) benchmark rate . From August 2022 until January this year, the total increase in the benchmark interest rate had reached 225 basis points (bps).