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Indonesia central bank leaves interest rates unchanged

JAKARTA: Indonesia's central bank held interest rates unchanged on Thursday (Mar 16) and stuck by its message that previous hikes were sufficient to steer inflation back to within target later this year.

Bank Indonesia (BI) left unchanged its benchmark 7-day reverse repurchase rate at 5.75 per cent, where it has been since January, as predicted by all 30 economists polled by Reuters.

BI's other main policy rates for overnight deposit and lending were also kept steady at 5 per cent and 6.5 per cent, respectively.

Governor Perry Warjiyo played down concerns about risks to Indonesian banks from problems at some global banks and said a government stress test showed domestic lenders were resilient.

Warjiyo said BI's rate hikes - totalling 225 basis points between August to January - were adequate to ensure headline inflation returned to its target range.

Headline inflation in Southeast Asia's largest economy picked up slightly to 5.47 per cent in February.

BI said inflation was on track to get back within its 2 per cent to 4 per cent target range from September this year, while core inflation would stay within target the whole year.

The central bank kept its economic growth outlook for 2023 at the upper end of a 4.5 per cent to 5.3 per cent range.

Source: Reuters/ga


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