Bank Indonesia (BI) trimmed the benchmark interest rate BI 7-Days Reverse Repo Rate (BI 7-DRRR) of June 2020 by 25 bps to 4.25%. Before the cut, the BI 7-DRRR was kept at level 4.50% for the past two months. Along with the benchmark interest rate, BI also slashed the deposit facility rate by 25 bps to 3.5% and lending facility rate also by 25 bps to 5%. This cut is in line with improvement in some indicators, such as: low inflation, strengthening rupiah exchange rate, and Indonesia’s external economic stability. The slash of BI 7-DRRR is unanimous with the projection of narrower Current Account Deficit (CAD) at around 1.5% to the Gross Domestic Product (GDP). The numbers are better than the projected 2.5%-3% to GDP. Currently, the economic growth depends on the effectivity of the coronavirus outbreak treatment.
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