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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.

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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.

BI Raises Reference Rate, Inflation Subsides

The inflation rate, which rose precipitously in previous months due to increasing prices of fuel and imported goods, has begun to subside. Bank Indonesia (BI) again raised its benchmark interest rate by 25 basis points.

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.

BI’s Monetary Policy Becomes More Independent

With the decline in the Fed’s influence on the stability of the rupiah exchange rate, BI's monetary policy can focus more on controlling inflation while continuing to encourage national economic recovery.

BI Still has Room to Maintain Interest Rates

Indonesia's foreign exchange reserves are in a strong position to maintain the stability of the rupiah exchange rate. As of 31 March 2022, the value of Indonesia's foreign exchange reserves was US$139.12 billion.

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Lower Interest Rate Expected to Accelerate Economic Recovery

Bank Indonesia (BI) is optimistic that the lower benchmark interest rate can accelerate the recovery of the national economy, which has been severely affected by the COVID-19 pandemic.

Time to Lower Interest Rate

Despite the issue of the current account deficit, the central bank has decided to cut its benchmark interest rate in an effort to drive the domestic economy. Bank Indonesia has hinted at the possibility of cutting the interest rate.

BI Keeps Financial Market Attractive

Bank Indonesia and the government have continued to try to reduce the current account deficit and to maintain the attractiveness of the financial market. An increase in BI\'s benchmark interest rate will be followed by a rise in the lending rates of the domestic bank.

Normalizing Interest Rate

Last week, the rupiah strengthened against the US dollar over three to four consecutive days, giving fresh hope that Bank Indonesia would not raise its benchmark interest rate (the 7-Day Reverse Repo Rate) during the board of governors meeting this week.

Interest Rate Hike Could Become the Short-Term Solution

The Indonesian currency has been fluctuating between Rp 14,800 and Rp 14,900 per US dollar for the past two weeks. As the solution, BI needs to immediately raise the benchmark interest rate in order to halt the outflow of foreign funds and lure them back into the country.

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