The central bank of Indonesia (Bank Indonesia) left its benchmark interest rate untouched for the first time in five months. At the two-day policy meeting, which was concluded on Thursday (21 November 2019), Bank Indonesia kept the BI 7-Day Reverse Repo Rate at 5.00 percent, while maintaining the deposit facility and lending facility rates at 4.25 percent and 5.75 percent, respectively.
In the previous four months the central bank of Indonesia had cut the benchmark rate by 25 basis points (bps), each month, to 5.00 percent amid low inflation, a manageable current account deficit and a stable rupiah exchange rate against the US dollar.
Although the benchmark rate was kept at 5.00 percent, Bank Indonesia did make another move in an attempt to boost economic activity. It lowered the amount of cash that banks must hold as reserves to provide additional liquidity to lenders.
Bank Indonesia Governor Perry Warjiyo said the central bank decided to cut this reserve requirement for banks by 50 bps per 2 January 2020, and will free up some IDR 26 trillion (approx. USD $1.85 billion) of additional liquidity for lenders; liquidity that can be used for new loans.
Read the full article in the November 2019 edition of our monthly report. You can purchase the report by sending an email to firstname.lastname@example.org or a WhatsApp message to the following number: +62(0)8788.410.6944