Bank Indonesia Raises Key Rate by 50 Bps to 5.25%

Jakarta: Bank Indonesia (BI) has once again decided to increase its BI 7-Day Reverse Repo Rate (BI7DRR) by 50 basis points (bps) to 5.25 percent.
 
"The meeting of the Board of Governors (RDG) of Bank Indonesia, held on October 16-17, 2022, decided to increase the BI 7-Day Reverse Repo Rate by 50 bps to 5,25 percent," BI Governor Perry Warjiyo said here on Thursday, November 17, 2022.
 
BI's deposit facility interest rate also rose by 50 bps to 4.5 percent, while the central bank's lending facility rate rose by 50 bps to six percent.
 
Perry explained that the decision s was a front-loaded, pre-emptive and forward-looking step to reduce inflation expectations, which are currently still high.
 
In addition, the central bank hopes core inflation can return to three  percent plus minus one percent in the first half of 2023.
 
"As well as strengthening the rupiah exchange rate stabilization policy so that it is in line with its fundamental value due to the strong US dollar and uncertainties on global financial markets, amid increasing domestic economic demand which remains strong," said Perry.
 
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