Bank Indonesia Holds Key Rate at 5.75% for Third Consecutive Meeting
| Pair | Now | Since publish |
|---|---|---|
| USDIDR | — | — |
- Bank Indonesia held key rate at 5.75% for third meeting.
- Measures introduced to support rupiah amid external pressures.
- Future tightening not ruled out by some analysts.
Bank Indonesia (BI) maintained its benchmark interest rate at 5.75% for the third consecutive meeting, a decision widely anticipated by market participants. The central bank’s board, led by Governor Perry Warjiyo, also kept the deposit facility rate at 4.75% and the lending facility rate at 6.50%. This move aims to bolster the rupiah’s stability amidst persistent external headwinds, including rising global oil prices and increasing US yields. To further support the rupiah and ensure ample domestic liquidity, BI introduced additional measures, such as reducing premia on hedging swaps and domestic Non-Deliverable Forwards (NDFs). Despite the hold, some analysts suggest the tightening cycle might not be concluded, citing ongoing external vulnerabilities and domestic inflation pressures.