The Bank Indonesia Has Maintained The Interest Rate At 6% As Of December 2024

ANTARA FOTO/Aprillio Akbar

The Bank Indonesia Has Maintained The Interest Rate At 6% As Of December 2024

Friday, 20 Dec 2024

Bank Indonesia has decided to maintain the benchmark interest rate, known as the BI Rate, at 6% following the Board of Governors Meeting held on December 17-18, 2024. "The Board of Governors of Bank Indonesia has resolved to keep the BI Rate at 6%," stated BI Governor Perry Warjiyo during a press conference on December 18, 2024. In today's announcement regarding the BI interest rates, the central bank also confirmed that the Deposit Facility rate remains at 5.25% and the Lending Facility rate stays at 6.75%. Perry emphasized that this decision aligns with the monetary policy direction aimed at ensuring inflation remains within the target range of 2.5±1% for 2024 and 2025, while also supporting sustainable economic growth.

"The focus of monetary policy is directed towards strengthening the stability of the rupiah against the backdrop of increasing uncertainty in the global economy due to U.S. policy directions and escalating geopolitical tensions in various regions," Perry remarked. Looking ahead, Bank Indonesia will continue to monitor the movements of the rupiah and inflation prospects, as well as the evolving conditions, to assess the potential for further reductions in the monetary interest rate.

"Macroprudential policies and payment systems will continue to be oriented towards supporting sustainable economic growth. A loose macroprudential policy will be pursued to encourage banking credit financing to priority sectors, growth, and job creation," Perry added.

Previously, a majority of economists projected that Bank Indonesia would maintain the BI Rate at 6%, given the ongoing depreciation of the rupiah. A consensus of economists gathered by Bloomberg indicated that the median projection from 31 institutions was set at 6%. However, there were also notable expectations that Bank Indonesia might reduce the interest rate by 25 basis points in the announcement following the Board of Governors Meeting on December 18, 2024, at 14:00 WIB.