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Jakarta Post

BI to hold benchmark rate until end of 2021, say analysts

  • Yunindita Prasidya

    Jakarta

Jakarta   /   Tue, October 20 2020   /  01:00 am
Bank Indonesia (BI) Governor Perry Warjiyo talks during a livestreamed press briefing after monthly Board of Governors meeting on June 18, 2020.(Courtesy of Bank Indonesia (BI)/-)

Bank Indonesia (BI) will hold its benchmark interest rate in the fourth quarter at 4 percent until the end of 2021 as the central bank focuses on maintaining a stable currency amid the COVID-19 induced uncertainty, analysts have said as they revise their previous projections. In a report released by JP Morgan Chase analyst Nur Raisah Rasid writes that the policy focus on financial stability continues to determine the space for rate cuts. With the current account deficit expected to widen amid an uncertain environment for capital inflow, JP Morgan expects that the policy stance will remain adaptive to the developments in the currency.  “In that context, we revised the BI rate path earlier this week and now expect to see the central bank stand pat through 2021 from a previous forecast of a cut this quarter due to the potential volatility around the US elections,” ...