FX.co ★ Indonesia Keeps Policy Rate Steady At 6.00%

Indonesia's Central Bank opted to keep its benchmark interest rate steady on Wednesday, maintaining its current monetary policy approach as it aligns with the goals of managing inflation within specified targets and fostering sustainable economic growth.

The Bank Indonesia Board of Governors, under the leadership of Governor Perry Warjiyo, decided to continue with a seven-day reverse repo rate of 6.00 percent for the second consecutive meeting.

This decision follows an unexpected increase in interest rates by a quarter-point during the August meeting.

"The decision aligns with our monetary policy direction aimed at maintaining inflation within our target range of 2.5±1 percent for the years 2024 and 2025, while also supporting sustainable economic growth," stated the bank in its official release.

Recent data indicates that Indonesia's inflation rate slowed to 1.84 percent in September, down from 2.12 percent in August, with low inflation recorded across all components.

Going forward, the bank anticipates that inflation will remain within its target range.

Economic projections suggest growth between 4.7 and 5.5 percent this year, with further expansion anticipated in 2025.

The economy is expected to perform well in the fourth quarter of 2024, driven primarily by increased investment, strong household consumption, and elevated government spending towards the year's end.

Additionally, the Rupiah exchange rate is projected to remain stable, benefiting from attractive yields, low inflation, and positive economic growth prospects. Bank Indonesia remains committed to ensuring economic stability.