Bank Indonesia keeps rates steady, focuses on rupiah stability

The bank also leaves its deposit and lending rates unchanged at 3.75% and 5.50%, respectively

Indonesia’s central bank held its policy rates unchanged for a third straight meeting on Wednesday (Dec 17), maintaining its focus on supporting the rupiah currency while it assesses the impact of its earlier easings.

Bank Indonesia (BI) kept the benchmark seven-day reverse repurchase rate at 4.75 per cent, as expected by 18 of 31 economists polled by Reuters. The rest had predicted BI would resume its rate-cut cycle.

The bank also left unchanged its overnight deposit rate and lending rate at 3.75 per cent and 5.50 per cent, respectively.

BI had slashed its main rates by a total of 150 bps between September 2024 and September 2025 as it looked to stimulate growth in South-east Asia’s biggest economy.

Governor Perry Warjiyo said in an online press conference the decision was in line with efforts to maintain the stability of the rupiah as global market uncertainties remain high, while the central bank continues to monitor if it has room for further policy rate easing.

BI has forecast growth of 4.9 per cent to 5.7 per cent next year, from 4.7 per cent to 5.5 per cent in 2025. The rupiah has been among emerging Asia’s weakest currencies against the US dollar this year.

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Hoping to increase domestic US dollar supply to bolster the rupiah, the government has said it would change export earnings retention rules to make exporters keep their US dollars onshore for longer from next year.

Inflation has remained comfortably within the central bank’s 1.5 per cent to 3.5 per cent target range for most of the year, with the November rate at 2.72 per cent. BI expects inflation to stay anchored next year. REUTERS

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