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BI kicks off new benchmark 7DRR at 5.25% to replace BI rate
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Bank Indonesia (BI) sets the new benchmark, seven-day reverse repo rate (7DRR) at 5.25 percent, replacing BI rate. (Antara/-)
B
ank Indonesia (BI) started the implementation of the long-anticipated new benchmark interest rate, the seven-day reverse repo rate (7DRR) on Friday, which is set at 5.25 percent.
BI governor Agus Martowardojo said in the August monthly meeting, the board of governors had decided to set the 7DRR at 5.25 percent, with lending facility rate set at 4.5 percent and lending facility rate lowered by 100 basis points (bps) from 7 percent to 6 percent
Under the new reference, the financial markets will drop the former benchmark BI rate, which is currently at 6.5 percent, and turn to the 7DRR which will be effective as of Saturday.
"To improve the transmission of policy, the central bank began using BI 7DRR as the benchmark interest rate to replace the BI rate," Agus said at the press briefing in Jakarta on Friday evening.
BI will also keep the interest rate corridor symmetrical and narrower by capping the deposit facility rate and lending facility rate at 75 bps below and above the BI 7DRR.
"The decision was in line with central bank efforts to maintain macroeconomic stability while maintaining domestic growth momentum amid the global economic slowdown," he went on. (evi)
