Monday, 16 September 2019 | 15:10 WIB

OJK: Now is the Time to Lower Benchmark Interest Rate in Indonesia

OJK: Now is the Time to Lower Benchmark Interest Rate in Indonesia (monex)

JAKARTA, NETRALNEWS.COM - Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Wimboh Santoso considers that it is time for the benchmark interest rate in Indonesia to decline. Because, in recent times, central banks from neighboring countries have begun to cut their benchmark interest rates.

Bank Negara Malaysia (BNM), The Reserve Bank of Australia (RBA) and the latest Reserve Bank of India (RBI) have also lowered their benchmark interest rates.

"Indonesia is time too. It's time to cut interest rates. It should be sooner," said Wimboh in Jakarta on Wednesday (6/12/2019).

He did not deny that the era of high interest rates has now begun to be abandoned by a number of countries, along with the potential for a world economic slowdown caused by trade friction between the United States (US) - China.

According to Wimboh, the decline in interest rates is expected to boost domestic economic growth. Moreover, this is done amid continuing global economic uncertainty. He considered, the decline in the benchmark interest rate would be a stimulus for the Indonesian economy. Especially at this time, Indonesian GDP is formed primarily through domestic demand.

"With the decline in interest rates, it gives optimism for the business movement even though there is a potential decline in the world economy. Now the whole world is exploring its domestic growth," he said.

However, Wimboh believes that Bank Indonesia (BI) as a monetary authority knows very well how to determine the direction of monetary policy. He also believes that internally BI is currently discussing the issue.

"To be counted by BI, please do it. We coordinate regularly with the Ministry of Finance, Governor of BI in order to share information. This is an important item as a consideration for BI for its timing," he concluded.