Central bank (Bank Indonesia/BI) today decided to raise its benchmark BI 7-Day Reverse Repo (RR) Rate by 25 basis points (bps) to 4.75% stabilize rupiah. BI Governor Perry Warjiyo earlier said BI needs to accelerate the decision on lifting the benchmark rate to respond to the current development on the domestic market and economic conditions .
BI also raised deposit facility rate by 25 basis points to 4.00%, and lending facility rate by 25 basis points to 5.50%. Perry said the rate hike as a pre-emptive move to anticipate the Federal Reserve meeting/The Fed on June 13 that likely to raise the benchmark rate by 25 basis points to 1.75% to 2%.
