BI Rate Up by 50 bps
12 July 2013 01:43 WIB
TEMPO.CO, Jakarta - Bank Indonesia's (BI) Board of Governors finally decided to raise the BI Rate by 50 basis points (bps) to 6.5 percent, higher compared to 25 bps projection made by a number of economists.
"The policy is to curb inflation following the increased price of subsidized fuel," BI Governor Agus Martowardojo, told a press conference, Thursday, July 11.
In addition to raising the BI rate, the Board of Governors also decided to raise the interest rate of BI's Deposit Facility (FASBI) to 4.75 percent.
"BI is certain that the policies would be enough to curb down the inflation," said Agus. BI expects inflation to be in the range of 7.2 to 7.8 percent this year, with a tendency to go up.
On the same occasion, the central bank also said it will take necessary steps to stabilize the rupiah exchange rate as well as maintaining liquidity in the forex market.
"With the BI Rate at 6.5 percent, inflation will return to normal, we believe that foreign funds will be re-enter the market," BI Deputy Governor Perry Warjiyo said.
MARTHA THERTINA
