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Indonesia Central Bank Keeps Rate Unchanged

Indonesia's central bank left its key interest rate unchanged for the third straight meeting, on Thursday.

The Board of Governors decided to retain the 7-day reverse repo rate at 5.00 percent. The bank had reduced the rate by a cumulative 100 basis points this year.

Policymakers observed that economic growth remained resilient driven by exports and household spending. Growth is forecast to reach around 5.1 percent in 2019 before rising to 5.1-5.5 percent in 2020.

Inflation remained low and well within the target of 2.5-4.5 percent in 2019.The bank said it is committed to maintain inflation in the range of 2-4 percent this year.

BI is likely to cut interest rates twice more in the current cycle, Gareth Leather, an economist at Capital Economics, said. The consensus is for just one further 25 basis point rate cut.

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