Indonesia's central bank retained its record low interest rate for the fifteenth consecutive time as policymakers were more concerned about inflationary pressures stemming from planned fuel price increases than risks to growth.
As widely expected by economists, the Bank Indonesia maintained its benchmark interest rate at 5.75 percent. Policymakers observed that inflation remains in line with the target range of 3.5 percent to 5.5 percent.
Inflation has slowed to 5.57 percent in April from 5.9 percent in March. But policymakers are wary of inflationary pressures from the proposed plan to cut fuel subsidies.
Southeast Asia's largest economy grew only 6.02 percent in the first quarter, which was the weakest since 2010. The nation's household spending, one of the biggest contributor to the economic output slowed, dragging both imports and investment.
The bank now expects the economy to grow in the lower range of 6.2 percent-6.6 percent growth forecast this year.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.