Bank Indonesia (BI) has maintained its benchmark 7-day reverse repurchase rate at 5.75% for the second consecutive meeting, alongside keeping the Deposit Facility rate at 5.00% and the Lending Facility rate at 6.50%. The decision was made amid financial market volatility driven by concerns over global trade tensions and government fiscal policies. Following the announcement, the rupiah remained weak, trading at IDR 16.520, while Jakarta’s main stock index dropped sharply by 7.1% on March 18, reflecting investor worries about economic stability. BI Governor Perry Warjiyo stated that the rupiah is undervalued compared to Indonesia’s economic fundamentals and is expected to strengthen in the future. He emphasized that the central bank is closely monitoring inflation and economic growth to determine potential adjustments to its interest rate policy. In February, Indonesia experienced an annual decline in the Consumer Price Index (CPI) for the first time since March 2000, primarily due to significant reductions in electricity tariffs, which brought inflation below BI’s target range of 1.5% to 3.5%. Despite these challenges, BI has retained its economic growth outlook for 2025 at 4.7% to 5.5%, supported by increased non-construction investments. This aligns with President Prabowo Subianto’s ambitious goal of raising economic growth to 8% by 2029. The central bank remains focused on maintaining financial stability while assessing global and domestic economic conditions to guide future monetary policy decisions.Source: https://business-indonesia.org/news/bank-indonesia-holds-rates-in-the-midst-of-market-uncertainties (ICE GIACARTA)

Fonte notizia: Business-Indonesia, 19 March 2025