Bank Indonesia Rate Decision - 23 May 2024

Holds rates at 6.25% after last month’s surprise hike

Bank Indonesia (BI) kept its policy rate at 6.25% during its fifth Board of Governor meeting this year, meeting market expectations

  • The Deposit Facility and Lending Facility rates were also kept at 5.50% and 7.00%, respectively.
  • BI statement: The decision is “consistent with pro-stability monetary policy, namely as a pre emptive and forward-looking step to ensure inflation remains under control within the target of 1.5% - 3.5% in 2024 and 2025”. It also added that its current stance to ensure ”the effectiveness in maintaining foreign capital inflows and stability of the rupiah exchange rate” highlighting its commitment to the rupiah’s stability. Meanwhile, BI continues its loose macroprudential policies to encourage bank lending for businesses and households.