THE Bank Indonesia (BI) board of governors meeting on April 23 to April 24 decided to raise the benchmark interest rate (BI Rate) by 25 basis points to 6.25%, breaking through the 6% rate that had been maintained for six months since October 2023 to reach the highest level since April 2015.

Raising the central bank’s benchmark interest rate was not a popular decision, but the monetary measure was an appropriate action for two reasons.