JAKARTA - The Bank Indonesia Board of Governors (RDG) meeting on 19-20 October 2022 decided to increase the BI 7-Day Reverse Repo Rate (BI7DRR) by 50 bps to 4.75%, the Deposit Facility interest rate by 50 bps to 4.00%, and the Lending Facility interest rate by 50 bps to 5.50%.
The decision to increase the interest rate is a front loaded, pre-emptive, and forward looking measure to reduce inflation expectations which are currently too high (overshooting) and ensure that core inflation will return to the target of 3.0±1% earlier, in the first half of 2023.
In addition, this increase is one of the steps to strengthen the rupiah exchange rate stabilization policy so that it is in line with its fundamental value due to the strengthening of the US dollar and high uncertainty in global financial markets, amidst increasing demand for the domestic economy which remains strong. (LM)