Such enhancement does not imply a change in the prevailing monetary policy stance. During the transition period prior to August 19, 2016, the BI Rate remains as Bank Indonesia’s policy rate. Within that timeframe, BI has started to announce BI 7-day Repo Rate as part of the term structure. The enhancement of monetary operation framework has three objectives.
First, to improve the policy signaling of policy rate as primary reference for interest rates in the financial market. Second, to strengthen the effectiveness of monetary policy transmission through its stronger impact on short term money market rates and bank rates. Third, to support financial market deepening, especially in encouraging transactions and developing interbank rate structure for 3 month to 12 month terms.