Kedutaan Besar Republik Indonesia
Embassy of the Republic of Indonesia
Ambassade de la RÉpublique d'Indonésie

BI maintains key rate at 4.25 percent

Bank Indonesia (BI) has decided to maintain its benchmark rate on the back of the macroeconomic and financial system stability as well as to support the domestic economic recovery.

BI’s seven-day reverse repo rate was kept at 4.25 percent, while lending rates and the deposit facility rate were also maintained at 5 percent and 3.5 percent, respectively.

a�?We believe [the decision] was in line with the macroeconomic and financial system stability and supports Indonesiaa��s economic recovery,a�? said BI Governor Agus Martowardojo in Jakarta on Thursday.

However, Agus added that BI continued to monitor external risks, such as instability generated from the Federal Reserve’s interest rate hike, which could be higher than anticipated, and the increase in oil price.

The domestic risks, meanwhile, include ongoing corporate consolidation, weaker-than-expected banking intermediation as well as risks to inflation, Agus added.

a�?Bank Indonesia will continue to optimize the monetary, macroprudential and payment system policy mix to maintain the balance between macroeconomic and financial system stability as well as strengthening the implementation of structural reform,a�? he said. (bbn)