JAKARTA (Reuters) – Indonesia’s central bank kept policy rates steady on Wednesday, saying the decision was consistent with efforts to stabilise the rupiah exchange rate and ensure inflation remains within target this year.
Bank Indonesia (BI) left unchanged its benchmark 7-day reverse repurchase rate at 6.00%, where it has been since October, as unanimously expected by economists surveyed by Reuters. Its two other policy rates were also unchanged.
BI targets inflation at a range of 1.5% to 3.5% in 2024, below 2023’s target of 2% to 4%.
Indonesia’s economic activities slowed last year amid declining exports and weakening household spending. Gross domestic product (GDP) growth in the third quarter was at its weakest in two years.
BI maintained its forecast that growth would pick up in 2024 to within a range of 4.7% to 5.5%, from 2023’s forecast of 4.5% to 5.3%, on rising spending for a general election and as the current government rushes to finish infrastructure projects.
With inflation staying within target, most economists have predicted BI’s next move will be a cut, though some disagree on the timing, which may depend on the rupiah exchange rate’s stability.
The rupiah was unchanged after the announcement to hold rates steady and traded around 15,640 per dollar on Wednesday, down 0.34% from a day earlier.
(Reporting by Gayatri Suroyo, Stefanno Sulaiman and Fransiska Nangoy; Editing by Martin Petty)
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