"Investment will increase when the banking interest rate declines," Susilo stated when contacted here on Thursday.
She said that the economic growth was affected by several factors such as investment growth, consumption, and exports.
Investment and exports must become the backbone rather than consumption, so that the people would become productive and not consumptive, she explained.
Susilo affirmed that the government, through Bank Indonesia (the central bank), could increase investment by lowering the banking interest rate.
"Bank Indonesia has the right to lower the interest rate by lowering the benchmark rate of its certificates (SBI). Thus, this will lower the banking credit interest rate," she explained.
Thus, lowering the interest rate could boost direct investment in Indonesia and in turn improve the investment climate, she claimed.
"Bank Indonesia has been tasked to manage expectations. Mathematically, the correct time to implement the instrument can be calculated," Susilo added.
She pointed out that the weakening of the rupiah currency causes a decline in commodity prices, but it could also boost exports.
"The weakening of the rupiah causes the prices of our commodities abroad to drop, but the value in rupiah that we receive still remains the same. Thus, the consumers abroad consider that our products are cheaper, which means that we can increase exports," she explained. (WDY)
: I Gusti Bagus Widyantara
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