Indonesia Leaves Rates Unchanged

(RTTNews) - Indonesia's central bank on Thursday held its key interest rate steady again to control inflation and underpin the economic recovery.

The Board of Governors decided to maintain the seven-day reverse repo rate at 3.50 percent, the Bank Indonesia said. The previous change in the rate was a quarter-point reduction in February 2020.

"The decision is consistent with the need to maintain exchange rate stability, control inflation and stimulate economic growth amid a build-up of external pressure," the bank said in a statement. The bank reiterated a slew of policy measures that include plans to raise the rupiah reserve requirement for various banks in a staggered manner.

The central bank expects the economy to grow 4.7-5.5 percent this year after a 3.69 percent expansion in 2021. Growth is expected to be supported by a faster vaccination program, broader reopening of the economy and policy stimuli by Bank Indonesia, the government.

Inflation is expected to remain low this year, within the 3.0±1 percent target. Adequate supply in response to increasing demand, anchored inflation expectations, rupiah exchange rate stability are expected to help keep inflation within the target range.