Speaking at a press conference on Wednesday (15/1/25,) following the Bank Indonesia (BI) Board of Governors meeting from January 14 to 15, BI Governor, Perry Warjiyo announced that the board has decided to cut the benchmark interest rate to 5.75 percent from 6 percent, Tempo is reporting.
Warjiyo said the interest rate fell by 25 basis points after a period of stability of 6 percent since September, in addition, the deposit facility will decrease by 25 basis points to 5.00 percent from the previous 5.25 percent, and the lending rate will also fall 25 basis points to 6.50 percent.
This decision is in line with the government’s commitment to maintaining macroeconomic stability, said Warjiyo. By keeping the inflation rate at 2.5±1 percent and the rupiah exchange rate in line with its fundamentals, the government is expected to create a conducive investment climate. The interest rate cut was made by considering the balance between controlling inflation and stimulating economic growth, according to Tempo.
Warjiyo added that the rupiah exchange rate against the US dollar until January 14, 2025, only weakened by 1.00 percent from the rate at the end of 2024. The rupiah’s performance against the US dollar is also relatively better than other currencies. These include the Indian rupee, Philippine peso, and Thai baht, which weakened by 1.20 percent, 1.33 percent, and 1.92 percent, respectively.
Source: Tempo
Image: Wikimedia Creative Commons
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