BI 7-Day Reverse Repo Rate Lowered 25 Base Points

Jakarta, InfoPublik—Bank Indonesia's Board of Governors' Meeting (RDG) agreed to  lower the BI 7-Day Reverse Repo Rate (BI7DRR) by 25 basis points (bps) to 4.00 percent, Deposit Facility (DF) rates by 25 bps to 3.25 percent , and Lending Facility  (LF rates by 25 bps to 4.75 percent.

"This policy is consistent with inflation which id forecasted to remain low, maintained external stability and serves as a follow-up measure to encourage economic recovery during the Covid-19 pandemic," Bank Indonesia (BI) Communication Department Executive Director Onny Widjanarko said in a press release received on Wednesday (7/22/2020).

According to Onny, RDG also agreed to continue the policy to maintain rupiah exchange rate stability in line with the currency’s fundamental value ​​and market mechanisms, amid the continuing uncertainty on global financial markets.

Moreover, to encourage national economic recovery during the Covid-19 pandemic, Bank Indonesia put more emphasis on strengthening the synergy of monetary expansion by accelerating the Government's fiscal stimuli.

In this regard, Bank Indonesia is committed to funding the 2020 state budget (APBN) through the purchase of SBN from the primary market in a measurable manner, both according to market mechanisms and directly as part of efforts to cover health costs, social protection, and sectoral ministries, institutions and local governments to support the National Economic Recovery program. In addition, Bank Indonesia also shares the burden with the Government to accelerate the recovery of MSMEs and corporations.

In addition, Bank Indonesia also continues to strengthen coordination of policies with the Government and the Financial System Stability Committee (KSSK) to maintain macroeconomic and financial system stability, including providing funding for the Indonesian Deposit Insurance Corporation (LPS) through the repo mechanism and/or purchasing SBN owned by LPS in accordance with Government Regulation No.33 of 2020.

"Bank Indonesia also continues to accelerate payment system digitization to accelerate the implementation of digital economy and finance as part of the economic recovery measures through collaboration between banks and fintech to expand access of MSMEs and the public to economic and financial services," he concluded. (reporter: Isma, translator: Penni P. Rusman)