Board of Governors' Meeting, May 2009: BI Rate Eases 25 bps - Bank Sentral Republik Indonesia
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August 21, 2019

No.11/14/PSHM/Humas

Today, following a comprehensive evaluation of the economic and financial situation in Indonesia and worldwide, Bank Indonesia decided to lower the BI Rate 25 bps to 7.25%. 

The improvement in the global economic outlook and developments has met with positive response visible in various financial indicators, including world stock indices, and the sharp drop in the risk premium spread. This has led to a resumption of capital inflows in emerging markets, including Indonesia, bringing with it appreciation in the rupiah, renewed gains in the Indonesian Composite Index and improved yield on Indonesian Government Securities. Despite this, observations by Bank Indonesia suggest that the world economy will continue to shrink albeit at a slowing rate.
 
Bank Indonesia predicts economic growth in 2009 to reach 3%-4% during 2009, with support from adequate domestic demand and better than predicted performance in exports. In related developments, inflation in 2009 is forecasted at the lower limit of the 5%-7% range. At end-April 2009, Indonesia’s international reserves position strengthened to 56.57 billion US dollars.

Conditions in the national banking system remain sound with capital adequacy still high at 17.4% and gross non-performing loans at a subdued level of less than 5%. Liquidity in the banking system, including the interbank money market, has progressively eased alongside growth in depositor funds. Lending performance in Q1/2009 was still below par, although improvement is expected in Q2/2009.

A complete report on the deliberations of the Board of Governors’ Meeting for May 2009, presenting  developments in monetary aggregates, inflation and the exchange rate during April 2009, will be available the Monetary Policy Review (MPR) on the Bank Indonesia website (http://www.bi.go.id).


Jakarta, 5 May 2009
Office of The Governor

 

Dyah N.K.Makhijani
Director

 

 

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