Financial News: Indonesia Central Bank Keeps Rates On Hold

Indonesia Central Bank Keeps Rates On Hold

03/19/2025 - 08:19:00 (RTTNews)

(RTTNews) - Indonesia's central bank left its benchmark interest rates unchanged on Wednesday, as widely expected.

The Bank Indonesia Board, led by Governor Perry Warjiyo, decided to maintain the BI rate at 5.75 percent.

The bank had reduced the rate in January, which was the first reduction since September 2024.

The deposit facility rate was retained at 5.00 percent and the lending rate at 6.50 percent.

The bank said the latest decision was consistent with its efforts to maintain inflation within the target range of 1.5-3.5 percent and to maintain the currency exchange rate stability.

ING economist Deepali Bhargava said the room for further cuts is becoming more limited than before.

A wider current account deficit and a higher fiscal deficit are unlikely to support the rupiah, the economist noted. Moreover, FDI inflows are unlikely to improve significantly amidst the trade tensions and an uncertain investment climate. A combination of these risks will keep BI on edge, she added.

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