Don’t Worry, The Benchmark Interest Rate Will Not Go up Yet

Benchmark Interest Rates

Indonesia’s inflation has reached 4.94% year on year (YoY), and core inflation has reached 2.86%. However, Bank Indonesia ensures it will not be in a hurry to raise its benchmark interest rate. This is due to inflation control.

BI Governor Perry Warjiyo, in the 2022 TPID National Coordination Meeting for Inflation Control, Thursday (18/8), explained, “We also don’t need to raise the benchmark interest rates at this time because of subsidies and food control. So we are not in a hurry to raise interest rates. stability and economic recovery.”

Several policies to control inflation include additional energy subsidies. This is so that no price increase burdens the community. Moreover, the availability of food supply, which involves the central and local governments, is guaranteed safe,

Furthermore, BI also took steps to control the rupiah exchange rate. The rupiah is stable at around Rp. 14,700 on an annual average. The depreciation of the rupiah since the beginning of the year has tended to be small, at 3.5%.

“We are intervening so that this does not then disrupt stability, disrupt economically and people’s recovery. Domestic prices do not rise,” he concluded.

As previously reported, The Indonesian economy recorded beyond expectation results. Indonesia’s economic growth managed to reach 5.44% (year on year/Yoy) in the second quarter of 2022. In this regard, Bank Indonesia focuses on its policies on the following matters.

BI Deputy Governor Dody Budi Waluyo in a press release, Tuesday (9/8/2022) explained, “Bank Indonesia’s policy mix is ​​directed at maintaining macroeconomic and financial system stability (pro-stability) through monetary policies, while other policies are directed at maintaining the sustainability of the economic recovery. (pro-growth), as part of the national economic policy mix.”

Dody said that the economic achievement was supported by increased consumption and export performance. Household consumption grew strongly at 5.51% (YoY), well above the previous quarter’s achievement of 4.34% (YoY).

This positive performance was driven by the increase in community mobility in line with the loosening of mobility restrictions and activities related to the celebration of National Religious Holidays (HBKN).

Investment grew at a slower pace of 3.07% (YoY), particularly construction investment, amidst the steady performance of non-construction investment.

Government consumption still contracted by 5.24% (YoY) mainly from a decrease in goods spending for Covid-19 Handling and National Economic Recovery (PC-PEN) in line with the improving conditions of the Covid-19 pandemic.