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View all search resultsBI pauses after three consecutive rate cuts, but open to more
Bank Indonesia has kept its benchmark interest rate in place after decreasing it by 25 basis points (bps) in each of the past three months, but the central bank is open for further cuts to encourage lending and push economic growth to its true potential.
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Bank Indonesia's (BI) logo is seen on Jan. 17, 2019, at the central bank's headquarters in Jakarta. (Reuters/Willy Kurniawan)
B
ank Indonesia (BI) has kept its benchmark interest rate in place after decreasing it by 25 basis points (bps) in each of the past three meetings but has said it is open to more cuts to encourage lending and push economic growth to its true potential.
Following the central bank’s two-day monthly policy meeting, BI Governor Perry Warjiyo announced in a press conference on Wednesday that the key interest rate, the BI Rate, remained at 4.75 percent.
“Going forward, BI will continue to monitor the effectiveness of transmission in the loose monetary policy that has been undertaken, the economic growth and inflation outlook as well as the stability of the rupiah exchange rate,” Perry said regarding whether BI would “make use of the room to cut the BI Rate”.
He went on to say that the possibility of further cuts was “still open”, given that inflation had been steadily maintained within the central bank’s target range of 2.5 plus/minus 1 percent for an extended period.
The governor also pointed to gross domestic product growth as a factor to consider.
“We view that the current and next year’s [projected] economic growth is still below the national output capacity. Thus, pushing domestic demand to reach high economic growth is consistent with all of our wishes,” the governor said.
The central bank’s projection for this year’s GDP growth is “above the midpoint” of the 4.6-to-5.4 percent range, and higher for 2026.
