Indonesia central bank keeps benchmark interest rate at 3.5%

SINGAPORE (ICIS)–Indonesia’s central bank on Thursday kept its benchmark interest rate at 3.5%, in support of the rupiah (Rp).

“This decision is in line with the need to maintain the stability of the Rupiah exchange rate against increasing uncertainty on global financial markets, amidst the forecast for inflation that remains low,” Bank Indonesia said.

The rupiah had fallen by more than 3% since mid-February against the US dollar.

The seven-day reverse repurchase rate at 3.5% is at an all-time low, after a 25 basis-point cut issued in February, to support recovery in southeast Asia’s biggest economy.

The economy suffered a pandemic-induced contraction of 2.1% in 2020, its first in two decades.

($1 = Rp14,412)

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