BI Raises Its Key Rate by 25 Bps to 5.75%

Husen Miftahudin    •    27 September 2018 16:38 WIB
indonesian economy (en)
BI Raises Its Key Rate by 25 Bps to 5.75%
Illustration (Photo:MI/Panca Syurkani)

Jakarta: Bank Indonesia (BI) decided to raise its 7-Day Reverse Repo Rate by 25 basis points (bps) to 5.75 percent after a Board of Governors meeting on Thursday.

"While also raising the Deposit Facility (DF) and Lending Facility (LF) rates by 25 bps to 5.00 percent and 6.50 percent respectively," BI Governor Perry Warjiyo said.

According to the central bank, the decision is consistent with ongoing efforts to lower the current account deficit within a manageable threshold while maintaining the attractiveness of the domestic financial markets, thus further strengthens Indonesia’s external resilience despite widespread global uncertainty. 

In addition to that, the Government’s seriousness and concrete measures, with Bank Indonesia, to stimulate exports and reduce imports is expected to lower the current account deficit, specifically in 2019, to around 2.5% of GDP. 

Furthermore, BI will continue to strengthen coordination with the Government and other relevant authorities to maintain economic stability and bolster external resilience. 

Moving forward, BI will monitor prevailing economic developments, such as the current account deficit, exchange rates, financial system stability and inflation, as follow-up measures to maintain macroeconomic and financial system stability.