Monday, October 14, 2024

Interest rate is steady according to Bank Indonesia

Reading Time: 2 minutes
Correspondent IBP

Journalist

Editor

Interview

Governor of Bank Indonesia (BI) Perry Warjiyo gave the latest signal regarding the benchmark interest rate which is currently at its lowest level of 3.50 percent. According to Perry, the national economic condition is still conducive enough to continue the BI rate policy going forward.

The reason is that the current high inflation rate is said not to come from demand factors but rather to the volatility of food prices. It is also believed that the movement of core inflation is at a level that tends to be gentle and not as aggressive as inflation in the consumer price index (CPI).

In addition, government intervention in controlling prices for strategic materials also supports people’s purchasing power and keeps inflation within a safe range. “For now, we don’t need to raise interest rates because there were subsidies, there was food control, so from policy interest rates there is no need to rush to increase them,” he said through an online channel after being summoned by President Jokowi on Thursday, August 18.

Perry added that the monetary authority’s steps in holding the BI rate are expected to further support the national economy so that the recovery process can continue to accelerate properly.

“So that we can maintain economic stability. We are all together in the spirit of national unity to control inflation so that the economy recovers faster and stronger,” he said. It is important to note that one of the main references for Bank Indonesia in setting interest rates is core inflation.

In a release from the Central Statistics Agency (BPS) earlier this month, it was revealed that core inflation was at 2.89 percent in July 2022. This level is still lower than the BI projection which estimates it can penetrate 2.99 percent.

Bank interest rates is one of economic efforts to maintain economic stability. The wrong policy related to bank interest rates can cause foreign investor will stop or postpone their intention to invest in Indonesia. Bank interest rates can make bank installment rates high and it can bother economic wheels and downgrading the process of supply and demand. Last but not least, the high of bank interest rates is one of factor of political unstability and adding poverty level including crime tensions in Indonesia.

Correspondent IBP

Journalist

 

Editor

 

Interview

SUBSCRIBE NOW
We will provide you with an invoice for your reimbursable expenses.

Free

New to Indonesian market? Read our free articles before subscribing to the premium plan. If you already run your business in Indonesia, make sure to subscribe to the premium subscription so you won’t miss any intelligence & business opportunities.

Premium

$550 USD/Year

or

$45 USD/Month

Cancelation: you can cancel your subscription at any time, by sending us an email inquiry@ibp-media.com

Add keywords to your market watch and receive notification:
Schedule a free consultation with us:

We’ll contact you for confirmation.

FURTHER READING

PT PLN (Persero) and PT PLN Energi Primer Indonesia (PLN EPI) have signed a memorandum of understanding (MoU) to utilize company-owned land for the construction of gas infrastructure.
PT Pertamina Cepu, a subsidiary of upstream oil and gas company PT Pertamina Hulu Energi (PHE), discovered gas potential in the Tedong (TDG)-001 well located in North Morowali, Central Sulawesi. With a gas content of 15 million cubic feet per day (MMSCFD), and 185 barrels of condensate per day (BCPD).
Wavin, a plastic pipe manufacturing company from the Netherlands, has put Rp825 billion (US$52.6 million) investment in Indonesia to establish a production facility in the Batang Integrated Industrial Estate, Central Java, making it the country’s first production facility in the Southeast Asia Region.
Minister of Investment, Rosan P. Roeslani, officiated the initial production at PT KCC Glass Indonesia’s facility in the Batang Integrated Industrial Zone (KIT), Central Java. The factory represents a significant milestone in Indonesia’s glass manufacturing sector.
The Ministry of Energy and Mineral Resources (ESDM) has planned to proceed with the construction of the Dumai-Sei Mangkei gas transmission pipeline in Sumatra and target its completion in 2027.
PLN Nusantara Power (PLN NP), in partnership with PLN Energi Primer Indonesia (PLN EPI) on Tuesday, October 1, 2024, set up collaboration with three regional administrations to utilize critical land for sowing biomass that will be used to generate coal-fired power plants (PLTU) and to provide training on multifunctional plants to local communities.