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BI keeps benchmark rate at 3.5%, lowers GDP growth projection
The rupiah had depreciated 3.62 percent year-to-date as of Monday but the depreciation was lower than the currencies of emerging economies such as Brazil, Turkey and Thailand.
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Bank Indonesia (BI) Governor Perry Warjiyo talks during a virtual press conference held after the central bank's two-day policy meeting on Jan. 21. (Courtesy of Bank Indonesia/-)
B
ank Indonesia (BI) decided Tuesday to maintain its benchmark interest rate at 3.5 percent to safeguard the rupiah as uncertainty continues to haunt the global financial market.
Aside from maintaining the seven-day reverse repo rate, the central bank also held the deposit facility rate and lending facility rate at 2.75 percent and 4.25 percent, respectively.
“This decision is in line with the need to safeguard the stability of the rupiah’s exchange rate against the high uncertainty in the global financial market, although the inflation forecast remains low,” BI governor Perry Warjiyo said in a virtual presser on Tuesday following a two-day monetary policy meeting.
He said the rupiah had depreciated 3.62 percent year-to-date as of Monday but the depreciation was lower than the currencies of emerging economies such as Brazil, Turkey and Thailand.
Meanwhile, Indonesia’s inflation stood at 1.37 percent on an annual basis in March, which is below the central bank’s targeted range of between 2 percent and 3 percent this year, due to relatively weak domestic consumer demand up to that month.
The rupiah has depreciated in recent months as global investors dumped emerging market assets on the back of a rally in the United States Treasury (UST) yields last month, driven by the US’ positive domestic growth outlook after President Joe Biden signed a US$1.9 trillion recovery stimulus on March 11.
However, the UST’s rally has stalled this month and the benchmark interest rate dropped to a five-week low of 1.56 percent on April 15.
