Bank Indonesia (BI) decided to keep its benchmark rate, the 7-day reverse repo rate, at 4.75 percent in the Governor Council Meeting (RDG) held on July 19-20. Meanwhile, the deposit facility rate and lending facility rate are also kept at 4 and 5.50 percent, effective from July 21.
“The decision is consistent with BI’s attempt to maintain macroeconomic and financial system stability, bearing in mind the dynamics of the global and domestic economy,” BI spokesman Arbonas Hutabarat told a press conference after the meeting at 11 pm yesterday, July 20, on Bank Indonesia compound in Jakarta.
Arbonas said that the process of economic recovery continues. However, it will not be as strong as expected particularly due to slower consumption, despite improved investment. Inflation is expected to slow down below the initial forecast due to the lack of demand and food prices that are kept under control.
He said that the central bank remains aware of several risks, both from the global economy, particularly the Fed’s bank sheet normalization, and domestic ones like corporate and bank consolidation in particular.
“Therefore, Bank Indonesia will continue to strengthen the combination of monetary, macroeconomic and payment system policies in order to preserve macroeconomic and financial system stability and maintain support of further economic recovery,” Arbonas said.
Bank Indonesia (BI) will also continue to enhance coordination with the government to keep inflation on target and push for continued structural reforms in a bid to support sustainable economic growth.