Bank Indonesia keeps rates steady, focuses on rupiah stability
The bank also leaves its deposit and lending rates unchanged at 3.75% and 5.50%, respectively
[JAKARTA] Indonesia’s central bank held its policy rates unchanged for a third straight meeting on Wednesday (Dec 17), maintaining its focus on supporting the rupiah currency while it assesses the impact of its earlier easings.
Bank Indonesia (BI) kept the benchmark seven-day reverse repurchase rate at 4.75 per cent, as expected by 18 of 31 economists polled by Reuters. The rest had predicted BI would resume its rate-cut cycle.
The bank also left unchanged its overnight deposit rate and lending rate at 3.75 per cent and 5.50 per cent, respectively.
BI had slashed its main rates by a total of 150 bps between September 2024 and September 2025 as it looked to stimulate growth in South-east Asia’s biggest economy.
Governor Perry Warjiyo said in an online press conference the decision was in line with efforts to maintain the stability of the rupiah as global market uncertainties remain high, while the central bank continues to monitor if it has room for further policy rate easing.
BI has forecast growth of 4.9 per cent to 5.7 per cent next year, from 4.7 per cent to 5.5 per cent in 2025. The rupiah has been among emerging Asia’s weakest currencies against the US dollar this year.
Hoping to increase domestic US dollar supply to bolster the rupiah, the government has said it would change export earnings retention rules to make exporters keep their US dollars onshore for longer from next year.
Inflation has remained comfortably within the central bank’s 1.5 per cent to 3.5 per cent target range for most of the year, with the November rate at 2.72 per cent. BI expects inflation to stay anchored next year. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
TRENDING NOW
Fed hike throws Singapore banks a margin lifeline; UOB likely to benefit more
He built the Vingroup empire. Now South-east Asia’s richest man is handing some key roles to his sons
Chagee, Mixue and Luckin won the market. Sustaining their edge is the harder part
Canada is upping oil flows to Asia, but South-east Asia’s refineries aren’t ready to handle them yet
