On Wednesday, Bank Indonesia (BI) maintained its key policy rates, a move anticipated by analysts in response to recent pressures on the rupiah. The benchmark 7-day reverse repurchase rate remained at 6.00 percent. This stability extends to BI's two other principal policy rates.
According to Governor Perry Warjiyo, this decision aligns with objectives to stabilize the rupiah and manage inflation effectively. The rupiah experienced a 1 percent depreciation over the previous week, with Monday witnessing the most significant drop since late January, just before the Bank of Japan's policy meeting. Despite these fluctuations, the rupiah's value remained stable following BI's announcement.
The adjustment from the Bank of Japan, ending years of negative interest rates, and the anticipation of the Federal Reserve's monetary policy review conclusion have influenced market dynamics. BI's stance also considers potential adjustments in US monetary policy, with expectations set for no immediate cuts in borrowing costs but with attention focused on future policy directions.
Indonesia's monetary authorities see potential for interest rate cuts in the latter half of the year, aiming to stimulate Southeast Asia's largest economy amidst declining exports, while keeping inflation within target ranges through to 2025.
Source: malaya.com.ph