Indonesia holds repo rate at 4¼% in line with effort to keep stability

By Wendy Van Sickle

Columbus, Ohio, March 22 – Bank Indonesia said its board of governors decided to hold the BI seven-day reverse repo rate at 4¼% at its meeting held March 21 and March 22.

The bank said in a statement that the policy is consistent with efforts to maintain macroeconomic and financial system stability while supporting domestic economic recovery.

Previous steps to ease monetary policy are in the bank’s view adequate to build domestic economic recovery momentum.

The bank believes maintained economic stability will be the backbone of stronger and more sustainable economic growth.

In making its decision, the bank said it considered that global economic growth is projected to accelerate in 2018, despite several risk factors that demand vigilance.

Additionally, it said, Indonesia’s economic growth in the first quarter of 2018 is predicted to be higher than the first quarter of 2017, backed by increasing government investment and consumption, stable private consumption and positive export performance.

Indonesia’s economy is projected to grow in the 5.1 %to 5.5% year-over-year range in 2018.

Meanwhile, CPI inflation declined to 0.17% month to month in February from 0.62% month to month in January.

Year over year, CPI inflation in February stood at 3.18%, which is consistent with the inflation target for 2018 at 3.5%, plus or minus 1%.

The bank also voted to keep the deposit and lending facility rates at 3½% and 5%, respectively.

© 2015 Prospect News.
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