Bank Indonesia (BI) maintains the BI Seven Day Reserve Repo Rate (BI 7-DRRR) interest rate at 3.50% in July 2020. Inflation realisation and outlook are still low at around 1.8% and 2.2% in 2021. NHKSI sees other factors considered by BI were: China and the US economic recovery, the potential increase in global inflation as the economy grows, high rupiah volatility, and domestic economic pressure due to the increasing daily average number of Covid-19 cases. We also see that BI do not need to be concern about the increase in global interest rates, especially as the Fed will not start its tapering program this year.
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