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Jakarta Post

BI holds key rates to stabilize rupiah

Bank Indonesia (BI) has refrained from cutting interest rates despite relatively low inflation as it focuses on buttressing the rupiah at a time when a strong US dollar is putting pressure on other currencies.

Deni Ghifari (The Jakarta Post)
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Jakarta
Wed, December 18, 2024

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BI holds key rates to stabilize rupiah Members of Bank Indonesia's (BI) board of governors pose for a photo before the press during a monthly press conference held in its Jakarta headquarters on Dec. 18, 2024. (JP/Deni Ghifari)

B

ank Indonesia (BI) has refrained from cutting interest rates despite relatively low inflation as it focuses on buttressing the rupiah at a time when a strong United States dollar is putting pressure on other currencies.

Following the central bank’s monthly policy meeting in Jakarta, BI Governor Perry Warjiyo announced in a press conference on Wednesday that the key interest rate remained at 6 percent, where it has been since September.

“It doesn’t mean that the room for a cut is not there, it remains open. But the timing is not right yet,” Perry said.

The deposit facility and lending facility rates also remained unchanged at 5.25 percent and 6.75 percent, respectively.

Perry said the decision was “focused on strengthening the rupiah exchange rate” amid intensifying global uncertainties.

The currency has been dropping steadily since late September and fell below the psychological threshold of Rp 16,000 per dollar in mid-December, erasing most of the gains it had made in the year’s third quarter.

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