Indonesia Leaves Monetary Policy Unchanged

The central bank of Indonesia left its benchmark 7-day reverse repo rate unchanged at 4.25 percent for the seventh straight meeting on April 19th 2018, in line with market expectations. Policymakers said the current policy stance is consistent with efforts to maintain macroeconomic and financial stability amid rising external pressures.
Joana Taborda | 4/19/2018 2:21:42 PM
The lending and the deposit facility rates were also left steady at 5 percent and 3.5 percent respectively.

Excerpts from the Bank Indonesia Press Release:

The policy is consistent with efforts to maintain macroeconomic and financial system stability as external pressures begin to build. Bank Indonesia considers the previous measures taken to ease monetary policy, supported by macroprudential and payment system policies, adequate to boost domestic economic recovery momentum. Moving forward, Bank Indonesia will remain focus on maintaining economic stability as the foundation of robust and sustainable economic growth. Nevertheless, several risks continue to demand vigilance, including external risks in the form of global financial market uncertainty, the rising of oil price and possible furtherance of the US-China trade war. To that end, Bank Indonesia continues to optimise the mix of monetary, macroprudential and payment system policies to strike an optimal balance between macroeconomic stability, financial system stability and the current domestic economic recovery process. In addition, Bank Indonesia also constantly strengthens policy coordination with the Government to maintain macroeconomic and financial system stability, while enhancing structural reforms.

Bank Indonesia projects domestic economic growth in 2018 in the 5.1-5.5% (yoy) range.

Moving forward, as domestic economic growth accelerates, the current account deficit is projected at 2.0-2.5% of GDP in 2018, which is under control and remaining within a safe threshold of not more than 3% of GDP.

Inflation is projected to remain within the target corridor of 3.5±1% in 2018.

Indonesia Leaves Monetary Policy Unchanged