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BI keeps rate at 3.5%, signals no change of stance in H1
Bank Indonesia has kept its benchmark interest rate at 3.5 percent and signaled that a change in its monetary policy stance was unlikely in the first half of the year.
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Bank Indonesia (BI) Governor Perry Warjiyo (left) and BI spokesman Erwin Haryanto meet journalists online on Oct. 22, 2021.
B
ank Indonesia (BI) has decided to hold its benchmark seven-day reverse repo rate at 3.5 percent and indicated that a change in its stance would not come anytime soon.
As the central bank wrapped up its monetary policy meeting on Thursday, it also kept its deposit facility and lending facility rates unchanged at 2.75 and 4.25 percent, respectively.
“Inflation, which remains low, is our basis for formulating the benchmark rate policy. We will hold the benchmark rate low at 3.5 percent until there are signs of inflation rising fundamentally,” BI Governor Perry Warjiyo told reporters during a live broadcast on Thursday.
“We will review our monetary policy stance on the benchmark rate in the third quarter this year,” he added.
Read also: Bank Indonesia holds benchmark rate at 3.5%
Statistics Indonesia (BPS) data shows that inflation in January had risen to an annual rate of 2.18, which is at the low end of BI’s target range from 2 percent to 4 percent. This trend, Perry said, would remain throughout the year.
Perry said a stable rupiah had helped prevent transmission of a hike in global inflation to the domestic consumer price index, along with coordination between the central bank and the government.
