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 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.