JAKARTA. Bank Indonesia (BI) decided to keep its benchmark rate unchanged at 6.5 percent at the conclusion of its two-day board of governors meeting, while maintaining its deposit and lending rates at 4.5 percent and 7 percent, respectively.
BI executive director of communications Tirta Segara explained that the central bank considered the economy to be stable, as reflected in a reasonable inflation rate at a range of 3 to 5 percent, as well as an improved current account deficit and a stable exchange rate.
"The dissemination of information on monetary policies has also shown improvement, including the central's bank plan to change the benchmark instrument, which will be implemented on Aug. 19," Tirta said at a press conference in Jakarta on Thursday.
He also stated that BI fully supported the tax amnesty program, which was expected to improve the country’s fiscal capability and increase liquidity in a bid to support domestic production activities.
However, he acknowledged that loan growth was still limited. As of May, loans climbed 8.3 percent year-on-year (yoy), a slight increase from 8 percent in April. Third-party funds increased 6.5 percent yoy in May, higher than the 6.2 percent in April.
"BI believes the monetary easing policy and implementation of the tax amnesty program will encourage loan growth to boost loans in the future," he went on, adding that currently, the seven-day (Reverse) repo rate remained at 5.25 percent. (Ayomi Amindoni)
