Indonesia Central Bank to Maintain Low-Interest Policy in 2021

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Laila Afifa

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  • TEMPO.CO, JakartaBank Indonesia (BI) Governor Perry Warjiyo said the central bank will keep its low interest rate policy next year. Currently, BI's benchmark interest rate stood at 3.75 percent.

    "This is the lowest in history and we will continue with low-interest rates until there are signs of increasing inflationary pressure," Perry said in a video conference, Monday, December 7.

    BI will also maintain a loose liquidity policy. So far, the central bank has spent Rp682 trillion on quantitative easing, which is 4.4 percent of the GDP.

    "[It is the] largest quantitative easing among emerging markets. We will continue to maintain this to encourage economic recovery in terms of demand and credit, as well as bank and financial sector financing," he said.

    Perry said that the central bank will also prioritize policies to stabilize the rupiah exchange in 2021. Rupiah stability, he said, would support efforts to restore the national economy.

    "Next year, we estimate economic growth between 4.8 and 5.8 percent, supported by consumption, exports, and investment," Perry said.

    Read: Rupiah Still Undervalued; BI Confident of Further Gains

    Caesar Akbar