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Economic Research
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19
May 2017
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Indonesia
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Economic Update
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Bank Indonesia’s
(BI) board of governors held the BI 7-day (reverse) repo rate – the benchmark
policy rate – unchanged at 4.75% on 18 May. We believe the Central Bank would
maintain its key policy rate for the rest of 2017 on:
1. Moderate
inflationary pressure;
2. Manageable
current account deficit.
Deposit facility
and lending rates were also maintained at 4% and 5.5% respectively. BI
believes that the move is consistent with its efforts to maintain
macroeconomic and financial stability, while preserving the domestic economic
recovery process. This is against a backdrop of global risks in the form of
the current discourse over US policy direction, along with geopolitical
risks, specifically in the Korean Peninsula. There are also domestic risks
with regards to upward changes in administered price inflation, as well as
ongoing consolidation in the corporate and banking sectors, which has
undermined the impact of economic stimulus.
Economist:
Rizki Fajar| +6221 2970 7065
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Friday, May 19, 2017
BI Continues To Hold Key Policy Rate In May
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