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BI keeps rates unchanged, expects no more Fed hikes
Bank Indonesia has kept its key interest rates unchanged for the third month in a row as the central bank deems its stance adequate to meet inflation targets and sees consumer price index (CPI) growth on a downward trajectory.
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Bank Indonesia Governor Perry Warjiyo speaks at a press briefing following the central bank's monthly monetary policy meeting on April 18, 2023. (Bank Indonesia/-)
B
ank Indonesia (BI) has kept its key interest rates unchanged for the third month in a row as the central bank deems its stance adequate to meet inflation targets and sees consumer price index (CPI) growth on a downward trajectory.
Following its monthly monetary policy meeting, BI announced on Tuesday that its benchmark seven-day reverse repo rate would remain at 5.75 percent, the level it reached in January after being raised by a cumulative 225 basis points (bps) beginning in August last year.
BI Governor Perry Warjiyo characterized the current monetary policy as “preemptive and forward-looking” and said inflation was easing faster than expected.
Core inflation, which has become the de-facto basis for BI's interest rate policy, eased to 2.97 percent in March from 3.09 percent the preceding month. Core inflation excludes from the CPI calculation certain food and energy products that tend to have volatile prices.
Headline CPI growth dropped to 4.97 percent year-on-year (yoy) in March, marking a slowdown from 5.47 percent recorded in February.
Perry projected that rate to drop below 4 percent in September, “or possibly in August”.
Much like the benchmark rate, the deposit and lending facility rates were also kept at last month’s figures of 5 and 6.5 percent, respectively.
