The decision to raise the interest rate in a more measurable way is a front-loaded, pre-emptive, and forward-looking step to ensure the low expectation of inflation so that the inflation will be kept within the range of 2–4 percent.
Jakarta (ANTARA) - Bank Indonesia (BI) on Thursday decided to raise its key rate or the BI 7-Day Reserve Repo Rate (BI7DRR) by 25 basis points (bps) to 5.5 percent.



The central bank also increased the deposit facility rate by 25 bps to 4.75 percent and the lending facility rate by 25 bps to 6.25 percent.



"The decision to raise the interest rate in a more measurable way is a front-loaded, pre-emptive, and forward-looking step to ensure the low expectation of inflation so that the inflation will be kept within the range of 2–4 percent," BI Governor Perry Warjiyo said while announcing the results of the December 2022 meeting of BI's board of governors on Thursday.


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The policy to stabilize the rupiah's exchange rate will continue to be strengthened to curb imported inflation as well as to mitigate the additional impact of the US dollar's strengthening amid the high level of uncertainty about the global financial market, he informed.



Stressing that the direction of the BI policy mix in 2023 will be the same as that outlined in the central bank's annual meeting on November 30, 2022, he said the monetary policy in 2023 will be focused on maintaining stability.



Meanwhile, macro-prudential policy, digital financing system, money market deepening, and inclusive and green economic programs and finance will constantly be directed toward pushing growth, he added.


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BI will also continue to strengthen coordination with the central government, regional administrations, and strategic partners.



To that end, coordination between the central and regional inflation control teams (TPIP and TPID) will continue by strengthening the national food inflation control movement (GNPIP) in various regions.



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Translator: Agatha Olivia Vi, Suharto
Editor: Fardah Assegaf
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