BI Rate Raised 25 bps to 9.25% - Bank Sentral Republik Indonesia
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October 29, 2020

No. 10/  40 /PSHM/Humas

In the Board of Governors’ Meeting held today, Bank Indonesia decided again to raise the BI Rate by 25 bps to 9.25%. This decision was taken after careful observation and consideration of current conditions and the outlook in the global, regional and domestic economy with the aim of safeguarding economic and financial system stability in Indonesia in support of the medium-term inflation target.

“Domestic inflationary pressure remains strong, mainly because of rapid growth in aggregate demand. For now, pressures from escalating energy, foodstuff and world commodity prices have eased, but nevertheless warrant continued vigilance.  Bank Indonesia sees the need to manage and contain growth in aggregate demand within safe limits for achievement of the inflation target and overall economic stability in the medium-term,” explained Governor of Bank Indonesia Boediono.

To achieve this target, Bank Indonesia will take further actions to optimise the use of all monetary policy instruments at its disposal.  The banking industry has a vital role in sustaining macroeconomic stability while upholding prudential banking principles in their lending operations, which are now expanding at a brisk rate. Integrated policy actions are envisaged to bring down the rate of inflation in 2009 to within the 6.5%-7.5% range.

Inflation in August 2008 reached 0.51%, down considerably from 1.37% in the preceding month with the annual rate of inflation recorded at 11.85%. Accordingly, inflation for January-July 2008 reached 9.4%, well above the 6.51% charted for the same period one year earlier. After taking account of the various risks and inflationary pressure expected to last to the end of the year, Bank Indonesia forecasts CPI inflation at end-2008 within the range of 11.5%-12.5% (yoy).

Looking ahead, Bank Indonesia will maintain an ongoing evaluation of its monetary policy stance with sustained monitoring of national and global economic conditions to secure the medium-term inflation target. 

Jakarta, 4 September 2008
Directorate of Strategic Planning
and Public Relations

Dyah NK. Makhijani



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