BI has no reason to raise the benchmark interest rate this month

BANK INDONESIA / BI - JAKARTA. Earlier this week, Bank Indonesia (BI) will hold a board of governors' meeting to determine the direction of interest rates. Director of Research at the Indonesian Center for Reform on Economics (Core) Piter Abdullah predicts that BI will not raise the benchmark interest rate this month.

According to him, there were no factors that made BI have to raise interest rates. Moreover, the Federal Reserve (the Fed) is also likely not to raise interest rates this month.

"There is currently no reason or urgency to raise interest rates. If  BI raises interest rates this month, then the space to raise interest rates will be narrower later. While the Fed will increase interest rates later this year," he said. Monday (10/22).

Another consideration, Indonesia's trade balance returned to surplus although the value was very thin. In addition, the government can still manage rupiah depreciation and inflation rates.

"So, I don't see any reason for BI to raise interest rates this month," Piter added. (Translator: Barratut Taqiyyah Rafie)