BI Rate will help real sector growth: Hatta

JAKARTA. Coordinating Economic Minister Hatta Rajasa said Bank Indonesia’s (BI) decision to maintain its benchmark interest rate (BI Rate) at 7.5 percent could help spur growth in real sector.

“[As a result] the real sector can keep running well and small and medium enterprises, in particular, can still get financial capital and promote investment,” he said in Jakarta on Thursday, as quoted by Antara news agency.

Hatta said the central bank’s decision amid the current economic situation was right because another increase could hold back development in the real sector and hamper small-scale entrepreneurs.

BI decided to maintain its benchmark interest rate at 7.5 percent during the BI board of governors’ meeting (RDG), on Thursday.

“The lending facility and deposit facility [Fasbi] rates have been maintained at 7.5 percent and 5.75 percent respectively,” said Agus Martowardojo.

He said results of an evaluation on Indonesia’s overall economy in 2013 and economic prospects for 2014-2015 showed that the policy remained consistent with efforts to bring inflation down to a targeted level of between 3.5 percent and 5.5 percent in 2014 and between 3 percent and 5 percent in 2015.

“The policy also aims to control Indonesia’s economic adjustments so the current account deficit can decline to a healthier level,” said Agus.