JAKARTA- Indonesia’s central bank left interest rates unchanged for an eighth straight month on Thursday, keeping its focus on making sure the rupiah remains stable and as inflation has stayed within target.
Bank Indonesia (BI) held the seven-day reverse repurchase rate steady at 5.75 percent , where it has been since January, as widely expected by 31 economists surveyed by Reuters. Its two other main rates were also kept unchanged.
The decision reaffirmed most analysts’ expectations that BI will stand pat on rates until global uncertainty eases due to concerns over pressure on the currency.
BI’s Governor Perry Warjiyo said the benchmark was consistent with the central bank’s stance to ensure inflation stays within the target range in 2023 and 2024.
The inflation target range will be lowered to 1.5 percent to 3.5 percent in 2024, the central bank said.
The rupiah remained emerging Asia’s best performer but has gradually depreciated against the US dollar in recent weeks to its weakest in six months, amid rising US Treasury yields. Indonesian bond yields have also risen.
BI has been trying to balance currency stability with keeping inflation in check while maintaining growth momentum in Southeast Asia’s largest economy as exports fall amid softening commodity prices.
“Monetary policy remains focused on controlling the stability of the rupiah exchange rate as an anticipatory and mitigation measure against the spillover impact of global financial market uncertainty,” Warjiyo told a press conference.
