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BI holds policy rate at 3.5%, prepares MSME financing boost
Bank Indonesia held the seven-day reverse repo rate (7DRRR) at 3.5 percent, maintaining its pro-growth monetary stance as the economy faces a resurgence of COVID-19 cases.
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Bank Indonesia (BI) Governor Perry Warjiyo speaks at a virtual press conference held after the central bank's two-day policy meeting on Jan. 21. (Courtesy of Bank Indonesia/-)
B
ank Indonesia (BI) announced on Thursday that it would hold its benchmark interest rate at a record-low 3.5 percent, a stance intended to accommodate economic recovery in response to slow business activity during the ongoing second COVID-19 wave.
Following a two-day policy meeting, the central bank also held its benchmark deposit facility rate at 2.75 percent and lending facility rate at 4.25 percent.
“This decision is in line with the need to ensure stability in the rupiah exchange rate and the financial system, amid low inflation and efforts to boost economic growth,” said BI Governor Perry Warjiyo on Thursday.
BI is also set to introduce an inclusive macroprudential financing ratio (RPIM) policy starting in September, which it hopes will improve financing for micro, small and medium enterprises (MSMEs) and related parties.
The central bank maintained its 2021 forecast of gross domestic product (GDP) growth of between 3.5 and 4.3 percent and inflation of between 2 and 4 percent.
Read also: BI maintains low interest rate amid virus surge
In July, the consumer price index (CPI) rose by 1.52 percent year-on-year (yoy), less than both the previous month and a year earlier, Statistics Indonesia (BPS) data shows.
