“…[there is] an anomaly between the BI benchmark rate and bank deposit interest rates in Indonesia at present,” the central bank governor [Burhanudin Abdullah] told the House of Representatives Financial Commission at a hearing which began Thursday evening and lasted Friday.
He said the anomaly lay in the fact that the BI rate (8.25 percent) was higher than the bank deposit rate of 5 percent.
“The BI benchmark rate should have been lower than the bank deposit interest rate,” he added.
He may can call it an anomaly, but the higher Bank Indonesia benchmark rate is central bank’s own policy choice.
It is the consequence of central bank’s obsession to lower inflation rate by setting excessively high interest rate.
Tags: Inflation, Interest Rate, teknik