Thailand
Indonesia holds rates at 5.75% for third straight meeting
JAKARTA — Indonesia’s central bank on Tuesday left its seven-day reverse repo rate unchanged at 5.75% for a third consecutive meeting.
“This decision is consistent with the preemptive and forward-looking stance of monetary policy to ensure the continued decline in inflation,” Bank Indonesia Gov. Perry Warjiyo told reporters at a briefing.
All 30 economists in a Reuters poll had forecast that the central bank would keep the benchmark rate at 5.75%, which is the highest it has been since July 2019. Most economists in the poll also predicted the rate would stay at the same level for the rest of 2023.
Bank Indonesia holds monetary policy meetings every month. It raised the key interest rate by 225 basis points between last August and January, then paused tightening in February.
The latest decision comes as inflationary pressures in Indonesia appear to be easing. The country’s year-on-year inflation rate dropped to 4.97% in March from 5.47% in February.
Inflation in the Muslim-majority country usually rises during Ramadan, which this year started in late March and ends this month. The Islamic fasting month is typically marked with consumers’ biggest monthly spending of the year, thanks to holiday bonuses companies are obliged to pay their employees.
The central bank expects inflation to return to its target range of 2% to 4% in September.
Central banks around the Asia-Pacific region tightened monetary policy in tandem with the U.S. Fed’s rate hikes that started early last year.
But some have paused the tightening or slowed down the pace recently. For example, Australia’s central bank this month left its cash rate unchanged at 3.6% to break a run of 10 straight hikes.
Malaysia’s central bank kept its benchmark interest rate unchanged at 2.75% in March for the second consecutive meeting. In March, the Philippine central bank slowed the pace of its key rate increase to 25 basis points from 50 basis points.
Source: https://asia.nikkei.com/Economy/Indonesia-holds-rates-at-5.75-for-third-straight-meeting