BI rate maintained at 7.5%

JAKARTA. Bank Indonesia (BI) has maintained its benchmark interest rate (BI rate) at 7.5 percent, considering that the current level is still in line with inflation control and current account deficit reduction efforts.

“The policy is still consistent with efforts to direct the inflation rate to a target of 4.5 plus minus 1 percent in 2014 and 4.0 plus minus 1 percent in 2015,” the BI’s executive director for communication, Tirta Segara, in a press conference in Jakarta on Thursday, as quoted by Antara.

He further said such a rate was also still in line with efforts to reduce the country’s current account deficit to a healthier level.

In its board of governors meeting today, the central bank has also maintained its lending facility rate and its deposit facility (Fasbi) rate at 7.5 percent and 5.75 percent, respectively.

Tirta said BI would still pay close attention to both domestic and global risks and would take anticipative measures to make sure that Indonesia’s economic stability remained well-maintained.

“BI will keep strengthening its monetary and macro-prudential policy mixtures, continuing efforts to deepen the financial market, and increasing coordination with the government on the inflation and current account deficit control,” he said.

The BI predicted that the global economic recovery was still ongoing; however, its acceleration was not as strong as what had been predicted before, Tirta said.

“China’s economic growth has yet to improve, following the implementation of its rebalancing policy. The prices of world primary commodities have increased, although still within a limited range,” said Tirta.

In the meeting, BI predicted that Indonesia’s economy would still continue to grow although household consumption was predicted to decline. Investment growth would be felt in the second semester this year, it said. (ebf)