Illustration (Photo:MI/Rommy Pujianto)
Illustration (Photo:MI/Rommy Pujianto)

BI Expected to Lower Key Interest Rate This Month

English indonesian economy (en)
Desi Angriani • 24 Oktober 2019 13:46
Jakarta: Institute of Economics and Social Research (LPEM) head of research for macro Febrio Kacaribu has predicted that Bank Indonesia (BI) will lower its 7 Day Reverse Repo Rate by 25 basis points (bps) from 5.25 percent to 5.00 percent.
 
The economist believes the Indonesian central bank can lower its key interest rate again because the Fed took the same decision recently.
 
"We believe BI can lower its key rate by 25 bps this month," he told Medcom.id here on Thursday, October 24, 2019.

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According to him, inflation is still under control due to decreasing volatile food prices. On the other hand, the country's current account deficit is still recovering. In the third quarter of 2019, the country's current account deficit stood at 2.1 percent.
 
"Current account defict is expected to reach 2.5-2.9 percent in 2019," he added.
 
Last month, BI decided to lower its key interest rate by 25 bps from 5.50 percent to 5.25 percent. In addition, the central bank also lowered Deposit Facility (DF) rates and Lending Facility (LF) rates by 25 bps to 4.50 percent and 6.00 percent respectively.
 
Ongoing trade tensions between the United States and China, accompanied by geopolitical risks, continue to suppress the global economy and amplify global financial market uncertainty. The tit-for-tat imposition of higher import tariffs by the United States and China is stifling world trade volume and global economic growth.
 

(WAH)
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