Jakarta –
Bank Indonesia (BI) is expected to raise the BI-7 Day Reverse Repo (BI7DRR) rate again to 0.5% at tomorrow’s (12/22) Board of Governors (RDG) meeting announcement.
The benchmark interest is currently at the 5.25% level. If it increases by 50 basis points, the benchmark interest is almost close to 6%, or 5.75%. CELIOS director Bhima Yudhistira Adhinegara said that the increase in the benchmark interest rate will have an impact on the increase in bank lending rates.
“Indonesia will return to the era of high interest rates before the pandemic,” he said detik comWednesday (21/12/2022).
According to Bhima, the trend of rising interest rates will also impact consumers’ purchasing decisions next year. You explained that motor vehicles and ownership are highly dependent on financial institution lending variables, especially regarding interest rates.
“The higher the interest on the loan, the homebuyer has to prepare more income to pay the monthly installments and interest,” he said.
Meanwhile, wage increases in various regions in 2023 will still not be able to keep pace with inflation and high interest rates. As a result, the risk of a slowdown in household consumption could materialize as early as the first quarter of 2023.
Segara Institute Executive Director Piter Abdullah predicts the landmark interest BI up to 50 bps. This is to maintain the difference with the Federal Reserve interest rate and will create new pressure for the rupee.
“The consequence is that deposit and credit rates, including mortgages, will also increase. Obviously this will be a burden for people who buy a house using a mortgage,” he said.
According to Piter, even though the benchmark interest rate has risen, it is still in a low range compared to its history. “The increase in mortgage interest rates will be more pronounced for new customers. In my opinion, old customers need not worry,” he said.
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(kilo/ara)