JAKARTA (TheInsiderStories) – Indonesia’s central bank (BI) decided keep its benchmark interest rate in 4.25 percent on Thursday (19/4), leaving it unchanged since September last year.
The deposit facility and lending facility rates are also seen unchanged, at 3.50 percent and 5.00 percent, respectively.
The officials have repeatedly said room for further easing of monetary policy is limited, but this has been helped in part by a lack of inflationary pressures.
The government has taken steps to limit cost pressures ahead of the fasting month of Ramadan in mid-May, when prices of volatile food items would normally spike. While inflation picked up to 3.4 per cent in March, prices have gained less than 4 per cent every month since July.
Fuel retailers would soon need government approval before raising prices and coal miners have been ordered to lower prices of the fuel sold to domestic electricity producers by a third.
Some economists also cited limited inflationary pressure as the main reason for BI to stay on hold.
Indonesia’s annual inflation rate was 3.40 percent in March, slightly higher than February’s but still below the midpoint of BI’s target range for the year of 2.5-4 to 5 percent.
The central bank projected the Current Account Deficit will be in the range 2-2.5 percent.