Indonesia’s central bank, Bank Indonesia (BI), made no changes to its benchmark 7-day reverse repo, leaving it at 3.50% during its June monetary policy meeting held this Thursday.
The central bank governor Perry Warijyo said that a rise in covid cases remains a risk to the GDP growth.
Additional comments
Fed statement reduces uncertainty.
Household consumption, manufacturing activity, exports improve in Q2.
Maintains 2021 GDP outlook at +4.1% to +5.1%.
Keeps 2021 current account deficit estimate at 1% to 2% of GDP.
To continue strengthen rupiah stabilisation measure.
2021 inflation YoY seen within 2%-4% target range.
2021 net liquidity injection amounting to 94.03 trillion rupiah.
2021 bond purchase in primary market amounting to 116.26 trillion rupiah.
Interest rate decision consistent with need to keep rupiah stable amid global market uncertainty, low inflation outlook, support GDP.
To support economic recovery, bank Indonesia will optimise monetary policy mix, accommodative macroprudential policy, accelerate digital payments.
Will monitor the dynamics of rising covid cases and impact to economy.
FX implications
The Indonesian Rupiah (IDR) showed little reaction to the in-line with expectations policy outcome from the BI.
At the time of writing, USD/IDR trades at 14,362, adding 0.90% on a daily basis.