BI Holds Reference Interest Rate at 4.5% Amidst the Covid-19 Pandemic

Bank Indonesia (BI) has decided to hold its benchmark interest rate, or the *BI 7 Days Reverse Repo Rate*, at 4.5%. The *Deposit Facility* interest rate remains at 3.75%, and the *Lending Facility* interest rate at 5.25%. This BI measure is one of the efforts to maintain stability amidst uncertainty caused by the Covid-19 pandemic.

With the easing of global financial market panic, the Rupiah strengthened again in the second week of April 2020. Bank Indonesia intensified its *triple intervention* policy through spot transactions, Domestic Non-deliverable Forwards (DNDF), and the purchase of government securities from the secondary market to boost the Rupiah's strength.

For information, the Covid-19 pandemic has impacted domestic economic growth. Exports in 2020 are expected to decline due to slowing global demand and low global commodity prices. Large-scale social restrictions (PSSB) have also impacted people's income and reduced productivity, thus affecting national demand, particularly household consumption and investment. This year, Indonesia's economic growth is projected to be only 2.3%.