JAKARTA (Yosefardi) – Bank Indonesia (BI), central bank, on Tuesday (May 19) decided to maintain its benchmark BI rate at 7.50%, while setting the Deposit Facility and Lending Facility rates at 5.50% and 8.00% respectively.
The decision is in line with the tight bias monetary policy to keep inflation in its target of 4±1% in 2015 and 2016 as well as to manage the current account deficit at around 2.5-3% of GDP in the medium term.
To keep the economic growth momentum, Bank Indonesia has loosened macroprudential policy by revising the LDR-RR regulation, LTV policy for mortgage loans as well as down payments on automotive loans.
Furthermore, Bank Indonesia will also continue to strengthen coordination with the Government not only in terms of controlling inflation and managing the current account deficit, but also by accelerating fiscal stimulus to boost economic growth.
To that end, Bank Indonesia supports government-led structural reforms to expedite infrastructure projects as well as continue various structural policies, therefore fostering economic agents’ optimism in the improving domestic economic outlook.