The result of Bank Indonesia Board of Governors’ Meeting on April 19-20 is to maintain BI 7-DRRR benchmark interest rate for April 2021 at 3.5%. It has been maintained at that level since February 2021, after BI cut the benchmark rate by 25 bps BI also kept deposit facility and lending facility rates at 2.75% and 4.25%
respectively. Other than to maintain the stability of rupiah exchange rate, BI’s decision was influenced by March 2021 inflation which was held at 0.08% MoM or 1.37% YoY. Low BI-7DRRR will give room for a decline in the banking prime lending rate (SBDK). It is expected that increased loan disbursement will boost business activities, which will positively impact the domestic economy.
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