Tempo are reporting that Bank Indonesia (BI) has again raised its interest rate benchmark based on the results of the Board of Governors’ Meeting on Wednesday to Thursday, January 18-19, 2023. BI Governor Perry Warjiyo announced today that the Board of Governors agreed on the hike in the seven-day reverse repo rate (7DRRR) by 25 basis points (bps) to 5.75-percent.
Perry made the announcement in a press conference at BI’s Thamrin Building, Central Jakarta, on Thursday, January 19, 2023 saying that the “BI Board of Governors’ meeting decided to increase the BI 7-day reverse repo rate to 5.75-percent.”
He added that the deposit facility rate is also increased to 5-percent and the lending facility rate is now at 6.50-percent.
According to him, the decision was made in a more measured manner as a follow-up to be front-loaded, pre-emptive, and forward-looking “in ensuring the decline in inflation expectations and inflation in the future,” say Tempo.
On December 22, 2022, the central bank announced the hike in BI7DRR by 25 bps to 5.5-percent at its Board of Governors’ Meeting. “[BI raises] the deposit facility rate by 25 bps to 4.75-percent and the lending facility rate by 25 bps to 6.25-percent,” Perry remarked.
In the meeting of the Board of Governors last November, BI also raised the BI7DRR by 50 bps or 0.5-percent to 5.25-percent. Just like before, Bank Indonesia argued that the decision was a follow-up step to ensure the continued decline in inflation expectations, so that core inflation was maintained within the range of 3 plus minus 1.