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Indonesia holds repo rate at 4¼% as domestic growth looks up in Q3
By Wendy Van Sickle
Columbus, Ohio, Oct. 19 – Bank Indonesia said its board of governors decided to hold the BI seven-day reverse repo rate at 4¼% at its meeting held Oct. 18 and Oct. 19.
The board said in a news release that its decision was consistent with efforts to maintain macroeconomic and financial system stability, while stimulating the domestic economic recovery.
The policy rate, it said, is believed to be adequate to maintain inflation within the target corridor.
Since its last meeting, the board said global economic gains have persisted, with an upward tendency, driven by stronger growth in Europe and China.
Meanwhile, domestic growth in the third quarter of 2017 is expected to outpace that achieved in the second quarter.
The rupiah appreciated against the dollar in September, although it lost ground toward the end of the month, and low headline inflation was maintained.
In September, CPI inflation stood at 0.13% month-to-month and 3.72% year-over-year. The month-to-month rate was below the average in September for the past three years of 0.15%.
“Bank Indonesia shall remain vigilant of the global risks, relating to tighter monetary policy and fiscal reform plans in the US, geopolitical pressures in Europe and Korean peninsula, as well as domestic risks, including the ongoing consolidation in the corporate and banking sectors,” the bank said in the news release.
The bank also voted to keep the BI seven-day reverse repo rate at 4¼% and the deposit and lending facility rates at 3½% and 5% respectively.
The bank trimmed each of the rates by 25 bps in September, as previously reported.
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