Governor of the Indonesian Central Bank (BI), Perry Warjiyo, says that the room to lower the BI-Rate benchmark interest rate is still open in the future.
“Is there still room to lower interest rates? Yes, with low inflation and economic growth,” Perry told a media conference on the Results of the BI Board of Governors Meeting (RDG) for November 2024 in Jakarta on Wednesday, November 20, 2024.
He, however, emphasized that the opportunity to lower the interest rate is highly dependent on global dynamics that continue to develop rapidly. Currently, BI prioritizes monetary policy to maintain the stability of the rupiah exchange rate amid high geopolitical and global economic uncertainty, including political dynamics in the United States.
Perry cited that the room to lower the BI-Rate policy interest rate is currently more limited than before.
“So it is still open, but of course it will depend heavily on data developments and conditions that continue to move. The focus now is on maintaining the stability of the rupiah exchange rate,” he said.
To strengthen the stability of the rupiah, BI has taken various measures, including intervention in the foreign exchange market, optimization of Bank Indonesia Rupiah Securities (SRBI) to attract portfolio investment, and purchasing Government Securities (SBN) from the secondary market.
The BI Board of Fovernors Meeting in November 2024 also decided to maintain the BI-Rate at 6 percent, the Deposit Facility interest rate at 5.25 percent, and the Lending Facility at 6.75 percent.
This decision is in line with the direction of BI’s monetary policy to ensure that inflation remains under control within the target of 2.5 percent plus minus 1 percent in 2024 and 2025, while supporting sustainable economic growth. “The stability of the rupiah exchange rate is our priority at this time. However, the opportunity to reduce interest rates remains, taking into account the inflation outlook and economic dynamics,” Perry concluded.
