Indonesia central bank holds interest rates steady, as expected
2024.07.17 03:54
JAKARTA (Reuters) – Indonesia’s central bank held its benchmark interest rate steady on Wednesday, as expected, saying the current level remained consistent with efforts to anchor inflation and manage the rupiah exchange rate’s movements.
The seven-day reverse repurchase rate, known as the Bank Indonesia (BI) Rate, was maintained at 6.25%, where it has been since April, as expected by all 35 economists polled by Reuters. BI also kept other policy rates unchanged.
Governor Perry Warjiyo said the decision would ensure inflation remained within the target range in 2024 and 2025, while the short term policy focus was directed at strengthening the rupiah and attracting inflows.
BI has been focusing on managing the rupiah’s volatility, including by intervening in the currency and bond markets, with inflation already within its target range since the middle of last year.
The rupiah has seen bouts of weakness this year due to a resilient U.S. dollar as well as investors’ concerns regarding Jakarta’s fiscal prudence under an incoming government that is set to take office in October.
The currency has recovered by around 2% in recent weeks since hitting a four-year low last month.
