BI Increases Its Reference Rate to 4.5%

Eko Nordiansyah    •    17 Mei 2018 21:38 WIB
indonesian economy (en)
BI Increases Its Reference Rate to 4.5%
Illustration (Photo: MI/Panca Syurkani)

Jakarta: Bank Indonesia (BI) increased its 7-Day Reverse Repo Rate by 25 basis points to 4.5 percent during a Board of Governors' meeting on Thursday, May 17, 2018.

"while also raising the Deposit Facility and Lending Facility rates by 25 bps to 3.75% and 5.25% respectively," the central bank stated.

BI is committed to  maintain economic stability amid the escalating risks in the global financial market and global liquidity downturn. It is expected to implement rupiah exchange rate stabilisation measures in line with its economic fundamentals, while maintaining market mechanisms. 

"The policy is backed by monetary operations that aims to maintain adequate liquidity in the foreign exchange and money markets," the central bank added. 

Furthermore, BI will implement macroprudential policy, which includes maintaining the Countercyclical Capital Buffer (CCB) at 0%, to maintain financial system stability and improve banking intermediation function. It will also constantly strengthen policy coordination with the Government and other relevant authorities to maintain macroeconomic and financial system stability as well as to strengthen structural reforms. 

"Bank Indonesia considers the previous policy mix and current policy response Moving forward, Bank Indonesia will regularly monitor the latest economic developments and ready to implement stronger measures to maintain macroeconomic stability," the central bank underlined.