The BI will still keep the BI rate at 6% due to the potential increase in inflation due to rising food prices
Jakarta (MidLand) –
Reny Eka Putri, money market analyst at Bank Mandiri, said Bank Indonesia (BI) will keep the BI-Rate at 6% because domestic inflation has the potential to rise.
“We see that the BI will still keep the BI rate at 6% due to the potential increase in inflation due to the increase in food prices ahead of fasting and Eid,” Reny told MidLand in Jakarta on Tuesday.
He said that inflation is currently likely to increase in the context of the momentum of the month of Ramadan and ahead of Eid al-Fitr 2024. Inflation is estimated to move between 2.7% and 2.9% on an average basis. Year after year (aa).
Therefore, BI is unlikely to reduce the policy interest rate at the BI Board of Governors (RDG) meeting on March 19-20, 2024.
Apart from this, rupee volatility is also still high due to external pressure arising from the potential delay in reducing the key interest rate of the United States (US) central bank or the Fed.
Currently, market participants tend to wait and pay close attention to the results of this week’s policy council meeting of the United States Central Bank (Federal Reserve) or the Federal Open Market Committee (FOMC) regarding the certainty of the direction of the Fed interest rates.
Previously, Bank Indonesia through the BI RDG of February 20-21, 2024 decided to keep the benchmark interest rate or BI-Rate at 6%.
Interest rate storage facility the interest rate also remained at 5.25%. loan facility maintained at the level of 6.75%.
“The decision to maintain the BI rate at 6% remains consistent with the objective of pro-stability monetary policy, namely to strengthen the stabilization of the rupee exchange rate,” BI Governor Perry Warjiyo said in the announcement of the BI results. RDG for February 2024 in Jakarta, Wednesday (21/2).
Reporter: Martha Herlinawati Simanjuntak
Editor: Faisal Yunianto
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