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Indonesia's central bank on Thursday left its key interest rate unchanged again in a bid to support the economic recovery.
The Board of Governors decided to maintain the seven-day reverse repo rate at 3.50 percent, the Bank Indonesia said. The previous change in the rate was a quarter-point reduction in February 2020. "The decision is consistent with the need to maintain inflation, exchange rate and financial system stability for economic growth amid a build-up of external pressure," the bank said.
The bank also announced plans to raise the rupiah reserve requirement for various banks in a staggered manner. The bank expects the economy to grow 4.7-5.5 percent this year after an estimated 3.2-4.0 percent expansion in 2021. Growth is expected to pick up this year on the back of stronger private consumption and investment. Inflation remain low, below the the 3.0?1 percent target, in 2021. The central bank expects inflation to remain within the target range this year amid sufficient supply to meet growing demand, anchored inflation expectations and exchange rate stability.
