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Jakarta Post

Bank Indonesia keeps rate at 6 percent in February

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Thu, February 21, 2019   /   04:55 pm
Bank Indonesia keeps rate at 6 percent in February Bank Indonesia Governor Perry Warjiyo. (Antara/Puspa Perwitasari)

Bank Indonesia (BI) announced its plan to maintain its policy rate for the third successive month after a two-day board of governors meeting on Thursday. The central bank also pledged to continue its efforts to ensure adequate liquidity in the banking sector to encourage loan growth this year.

During the meeting, BI decided to maintain its seven-day reverse repo rate at 6 percent. The lending facility and deposit facility rates were also maintained at 6.75 and 5.25 percent, respectively.

BI Governor Perry Warjiyo said the decision was consistent with the joint efforts between the central bank and the government to strengthen the external stability of the country, particularly to manage the current account deficit and to maintain the attractiveness of Indonesian financial assets.

Perry added that the central bank was constantly monitoring the latest developments in global affairs, noting the potential slowdown of the United States economy, uncertainties surrounding the Brexit negotiations as well as slowdown of China’s gross domestic product (GDP) growth.

“These global and financial developments, on one hand, present challenges [for Indonesia] to boost exports but on the other hand encourage foreign capital inflows into developing countries, such as Indonesia,” said Perry in Jakarta on Thursday.

He went on to add that despite the central bank’s monetary policy focus in safeguarding the external stability, BI would continue its expansive monetary operation so as to ensure adequate liquidity in the banking sector to encourage loan growth.

“Our monetary operation strategy going forward is increasing the availability of liquidity. We [will] add the frequency and volume of term repo [auction] as well as foreign exchange swaps, among other things,” said Perry. (bbn)