Global Economic Risks Rise, BI Holds Interest Rate in November 2024

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Adi Ahdiat 20/11/2024 16:14 WIB

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Bank Indonesia held its benchmark interest rate, the BI-Rate, steady at 6.00% in November 2024. This was partly to anticipate increasing global economic risks.

Bank Indonesia Reference Rate (January 2019 - November 2024)

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Bank Indonesia Reference Rate (January 2019 - November 2024)

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Bank Indonesia (BI) held its benchmark BI-Rate at 6.00% in November 2024.

The deposit facility interest rate also remained at 5.25%, and the lending facility interest rate at 6.75%, unchanged from the previous month.

BI's decision was based on several factors, including anticipating global economic risks.

"Global economic risks are increasing, accompanied by rising geopolitical tensions and trade fragmentation," BI stated in a press release on Wednesday (20/11/2024).

According to BI, current political developments in the US are leading to more expansive fiscal policies and domestically-oriented economic strategies, including the implementation of high trade tariffs.

"These developments will impact the risk of slowing economic growth and a resurgence of global inflation," BI said.

"In the US, the inflation reduction process will be slower, so the reduction of the Fed Funds Rate is also expected to be more limited," it continued.

Nevertheless, BI assesses that the Indonesian economy remains stable and has the potential for positive growth until the end of the year.

"In the fourth quarter of 2024, economic growth is expected to remain strong, supported by government consumption, in line with the increase in government spending at the end of the year," BI stated.

"Household consumption is expected to continue growing in line with the maintained Consumer Confidence Index and the positive impact of regional elections in various areas," it continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."