Bank Indonesia (BI) has raised its key interest rates in what it calls a “preemptive measure” in light of global risks caused by the uncertain outlook for monetary policy in the United States and geopolitical tensions.
The central bank lifted the benchmark BI Rate by 25 basis points (bps) to 6.25%. It also raised the rates for its deposit facility and its lending facility by the same amount to 5.50% and 7%, respectively.
BI Governor Perry Warjiyo explained that they had considered several scenarios about the US Federal Reserve’s key interest rate, the federal funds rate (FFR), and global conflicts.
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