There is still room (to cut the benchmark rate). Of course, we will see its possibility by always maintaining stability, particularly the rupiah's exchange rate, and finding ways to push economic recovery more effectively.
Jakarta (ANTARA) - Bank Indonesia (BI) still has room to lower its 7-Day Reverse Repo Rate (BI7DRR), which currently stands at 3.75 percent, to boost national economic recovery, according to BI Governor Perry Warjiyo.



“There is still room (to cut the benchmark rate). Of course, we will see its possibility by always maintaining stability, particularly the rupiah's exchange rate, and finding ways to push economic recovery more effectively,” he said during a working meeting with Commission XI of the House of Representatives (DPR) in Jakarta on Tuesday.



In 2020, the central bank cut its benchmark rate five times by 125 basis points to 3.75 percent, the lowest level since 2013.



The BI governor said the benchmark rate will be lowered further after considering the effectiveness of the policy on the rupiah's exchange rate, external stability, and its impact on the national economy.



Hence, at the meeting of the board of governors in January, 2021, the central bank decided to keep the benchmark rate unchanged at 3.75 percent, Warjiyo said.



As part of the loose liquidity or quantitative easing (QE) policy, BI has spent Rp740.7 trillion, or 4.8 percent of the national gross domestic product (GDP), he informed.



A total of Rp726.6 trillion, or 4.71 percent of the GDP, was spent on QE in 2020, and Rp14.16 trillion on February 4, 2021, he said.



"The figure is one of the biggest among the emerging markets as can be seen from banking liquidity. (The ratio of) liquid instrument to third party fund placement (DPK) is 31.67 percent and to low interest rate is 3.04 percent," he noted.



BI will continue to strengthen its coordination and synergy with the government, including buying of sovereign debt papers (SBN) in the primary market, Warjiyo said.



Under joint decrees (SKB) I and II signed with the government in the budget year 2020, BI bought SBN worth Rp473.4 trillion — Rp75.9 trillion under SKB I and Rp397.6 trillion under SKB II. Based on the extended SKB, BI also bought SBN worth Rp35.7 trillion in the primary market on February 4, 2021, he informed.



"This reflects close fiscal and monetary policies, viewed not only from the policies themselves, but also from the ways to accelerate fiscal stimulus to push demand in this sector, with BI participating in the financing," he observed. (INE)


Related news: International trade agreements will drive RI's economic recovery: govt

Related news: Thohir points to Indonesia's economy faring better than other nations




EDITED BY INE







Translator: Astrid Faidlatul H/Suharto
Editor: Fardah Assegaf
Copyright © ANTARA 2021