Indonesia Central Bank Keeps Key Rates Unchanged

Indonesia's central bank left its benchmark interest rates unchanged, as widely expected, as the economy is projected to grow less than previously expected due to the spread of the COVID-19 delta variant.

The board of governors of Bank Indonesia, on Thursday, decided to hold the the BI 7-Day reverse repo rate at 3.50 percent. The previous change in the rate was a quarter-point reduction in February.

The deposit facility rate was maintained at 2.75 percent and the lending facility rates at 4.25 percent.

The decision was in line with the need to maintain exchange rate and financial system stability due to uncertainty in global financial markets, amid low inflation forecasts and efforts to support economic growth from Covid-19, the bank said in the statement.

The central bank forecast the economy to grow in the range of 3.5 percent - 4.3 percent this year, which was revised down from the previous outlook of 4.1 percent - 5.1 percent.

Looking ahead, the current account deficit in 2021 was predicted to remain low in the range of 0.6 percent -1.4 percent of GDP.

Inflation is expected to remain within its target range of 2-4 percent in 2021 and 2022.

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