Bank Indonesia (BI) has again raised its benchmark interest rate as a step to maintain national economic stability, strengthen the rupiah exchange rate, and control inflation. With higher interest rates, investors tend to be more interested in investing capital in Indonesia because it offers better returns. The influx of foreign investment can increase demand for the rupiah, thereby helping keep the exchange rate stable. At the same time, rising interest rates make borrowing costs more expensive, so people and companies tend to reduce spending and use of credit. This can help reduce the rate of inflation and keep the increase in prices of goods and services under control. However, this policy also has an impact on society. Installments for mortgages, vehicle loans, credit cards and business loans have the potential to increase, while interest on savings and deposits can be higher, thus providing benefits for savers. Even though it may slow economic growth in the short term, Bank Indonesia hopes that this policy will create stronger economic stability, maintain people’s purchasing power, and increase investor confidence in the Indonesian economy in the long term. For further information, please visit
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