Indonesia's central bank holds rates unchanged to support rupiah

[JAKARTA] Indonesia’s central bank kept policy rates unchanged on Wednesday (Apr 22) to anchor the rupiah’s stability amid the war in Iran, as expected, with the currency already hitting record lows multiple times this month.

Bank Indonesia (BI) held the benchmark 7-day reverse repurchase rate at 4.75 per cent, where it has been since September. All economists polled by Reuters had unanimously expected the bank to stand pat.

The overnight deposit facility and lending facility rates were also kept steady at 3.75 per cent and 5.50 per cent, respectively.

The rupiah, which hit a fresh record low of 17,193 a dollar last week, has been hammered by capital outflows arising from concerns about Indonesia’s fiscal sustainability, the independence of its central bank and transparency issues in its capital market, as well as risk-off sentiment caused by the Iran war.

Governor Perry Warjiyo told an online press conference that the policy rate decision is consistent with efforts to support the rupiah.

BI stands ready to adjust policies to bolster support the currency while keeping inflation within the target range, he added.

The International Monetary Fund last week cut its global growth outlook in 2026 due to war-driven energy price spikes. It also shaved 0.1 percentage points off its Indonesia outlook, cutting its forecast to 5 per cent.

South-east Asia’s largest economy is more resilient than other countries, its officials have said, citing their decision to keep subsidised fuel prices unchanged to keep inflation low as well as a potential increase in export earnings as a result of higher commodity prices.

BI kept its 2026 economic growth outlook for Indonesia in the range of 4.9 per cent to 5.7 per cent, and maintained that inflation would stay within its target range of 1.5 per cent to 3.5 per cent until 2027.

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BI cut the benchmark rate by a total of 150 basis points between September 2024 and September 2025. REUTERS