BI Keeps Interest Rate Again, Businessmen React

The central bank has decided to maintain its interest rate following the February 2024 Board of Governors meeting.

Tim Redaksi

21 Feb 2024 - 16.50
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BI Keeps Interest Rate Again, Businessmen React

Illustration - A citizen was passing in front of the Bank Indonesia building, recently./Bisnis-Fanny Kusumawardhani.

Bisnis, JAKARTA — Bank Indonesia (BI) maintained its benchmark interest rate at the Board of Governors Meeting (RDG), which concluded on Wednesday (2/21/2024).

Previously, in a survey conducted by Reuters from February 12–16, 2024, as many as 30 economists had projected the central bank to keep its benchmark interest rate or BI 7-day reverse repo rate (BI-7DRR) at the level of 6 percent. BI's hawkish policy is projected to remain until the end of the first quarter of 2024. 

Furthermore, BI is expected to begin rate cutting in the second quarter of 2024. The median forecast from the economists' survey indicates that the interest rate will remain unchanged until at least the end of March, followed by a 25 basis points cut each quarter until the end of the year.

Thus, by the end of this year, BI's interest rate is estimated to be at 5.25 percent. This aligns with the market's expectations for the Fed to cut its rate by 75 basis points in 2024. “We retain our forecast of the first-rate cut by BI during the June meeting after the Fed makes its first rate cut announcement in May,” said Societe Generale economist Kunal Kundu, as quoted by Reuters.

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© Copyright 2024, Hak Cipta Dilindungi Undang - Undang.