JAKARTA- Indonesia’s central bank kept its key interest rate steady at a record low on Thursday, holding fire after a bout of monetary support during the pandemic, and pledged to strengthen currency intervention amid global market uncertainty.
Bank Indonesia (BI) left the benchmark 7-day reverse repurchase rate unchanged at 3.50 percent, as widely expected in a Reuters poll, after cutting them in February.
“The rate decision was in line with the need to maintain rupiah stability amid rising uncertainty in the global financial market,” Governor Perry Warjiyo said in a virtual news briefing.
Policymakers are trying to balance the need to support Indonesia’s coronavirus-hit economy, Southeast Asia’s largest, with concerns further monetary easing could weigh on the rupiah, already under pressure due to capital outflows.
The rupiah has fallen more than 3 percent in the past month as investors dumped riskier assets broadly as rising US bond yields sparked volatility in global markets.
It opened 0.5 percent higher after the Federal Reserve reiterated its commitment to keeping US interest rates low, but pared some of that after BI’s decision.