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BI Holds Interest Rates at 3.5% to Stabilise the Rupiah Amidst Accelerated COVID-19 Infections

BI Holds Interest Rates at 3.5% to Stabilise the Rupiah Amidst Accelerated COVID-19 Infections

July 23, 2021 | Updated at July 23, 2021

http://islamicmarkets.com/articles/bi-holds-interest-rates-at-3-5-to-stabilise-the-rupiah
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By IM Insights

Bank Indonesia (BI) has decided to hold its interest rate at 3.5%, as it has been since February of 2021. The other two main policy rates in Indonesia also remain unchanged, with the deposit facility rate at 2.75%, and the lending facility rate at 4.25%, as stated by Perry Warjiyo, Governor of BI, at a virtual press conference held on the 22nd of July 2021.

Why it Matters?

At present, Indonesia is tackling one of the worst COVID-19 outbreaks in the world, with 1,000 deaths reported daily. This is due to the rapid spread of the Delta variant which has resulted in Government of Indonesia inflicting lockdown restrictions till the 25th of July 2021. In light of these challenges, BI’s policy decision is in line with the need to support the domestic e...