JAKARTA (Reuters) -Indonesia’s central bank held policy rates steady on Wednesday, as expected, pausing in its easing cycle while reiterating an objective to balance the stability of the rupiah with efforts to lift economic growth.
Bank Indonesia kept the benchmark 7-day reverse repurchase rate at 5.50%, as expected by 21 of 31 economists polled by Reuters.
It also left unchanged the overnight deposit and lending rates at 4.75% and 6.25%, respectively.
BI has cut interest rates three times since September. It has also downgraded its economic growth outlook twice this year, listing challenges such as slowing domestic demand and shaky global growth due to the impact of U.S. tariffs and wars.
On Thursday, BI kept its 2025 growth forecast at a range of 4.6% to 5.4%.
Governor Perry Warjiyo said at a press conference that BI would continue to monitor for room to further support growth, while maintaining inflation within target and keeping the rupiah stable.
Annual inflation was 1.6% in May, near the bottom of BI’s target range of 1.5% to 3.5%, which some analysts say points to sluggish household spending.
Trying to bolster growth, the government has launched a $1.5 billion incentive package to stimulate demand, including subsidies for transportation fare and cash and food handouts for June and July.
(Reporting by Gayatri Suroyo, Stefanno Sulaiman, Fransiska Nangoy; Editing by John Mair)
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