REPUBLIKA.CO.ID, JAKARTA -- Bank Indonesia (BI)'s decision to maintain its benchmark interest rate, locally known as BI Rate, at 7.5 percent may help the growth of the real sector, Coordinating Minister for Economic Affairs Hatta Rajasa said.
"I think the BI Rate of 7.5 percent is good for the real sector, particularly small and medium businesses to obtain working capital as well as for the effort to boost investment," he said here on Thursday.
He said the decision to keep the reference rate unchanged was relevant to the present condition. If the benchmark rate was raised again it would have an impact on the growth of the real sector, particularly small and medium entrepreneurs.
"I think the BI Rate of 7.5 percent is enough. If it is raised again many entrepreneurs in the real sector will be harmed," he said.
At the Board of Governors' meeting held here on Thursday, BI decided to maintain its reference rate at 7.5 percent.
"The lending facility rate and deposit facility rate stay unchanged at 7.5 percent and 5.75 percent, respectively," BI Governor Agus Martomardojo noted at a press conference held after the meeting.
He added that based on the total evaluation of the economy in 2013 and gauging the economic prospects in 2014 and 2015, it was found that the policy continues to be consistent with the efforts to lead inflation to a level between 3.5 to 5.5 percent in 2014 and 3 to 5 percent in 2015.
"The policy is also intended to control Indonesia's economic adjustment so that the current account deficit can drop to a healthier level," he claimed.
The decision to maintain the BI reference rate at 7.5 percent is same as its rate in December 2013.
Agus pointed out that BI will continue strengthening the combination of monetary and macro-prudential policies.
In addition to that, BI would also scale up its coordination with the government with regard to controlling inflation and the current account deficit, including policies to improve the economic structure, he remarked.
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