This decision was in line with expectations since Indonesian President Joko Widodo had only named one candidate (who was approved by the House of Representatives).

We consider this a good decision – amid still uncertain times – because it suggests that there will be consistency in terms of the central bank’s monetary policymaking. Moreover, Warjiyo did a good job steering Indonesia through the COVID-19 crisis, the Russo-Ukrainian war, and (earlier) the US-China trade war. In line with what we have seen in recent years, Warjiyo stated that front-loaded, preemptive, and forward looking monetary policy will be applied to maintain stability amid the ongoing global volatility, while macro-prudential measures will be kept relatively loose to support lending and economic recovery.

Bank Indonesia’s March 2023 Monetary Policy Meeting

After concluding its two-day policy meeting (on 15-16 March 2023), Bank Indonesia decided to keep its benchmark interest rate (the BI 7-Day Reverse Repo Rate) at the level of 5.75 percent, while maintaining the deposit facility and lending facility at 5.00 percent and 6.50 percent, respectively.

It is important to emphasize that Bank Indonesia has now left its benchmark rate unchanged despite the US Federal Reserve continuing to raise its key rate (albeit not as aggressive as before, and it is also true that the recent banking crisis should make the Fed much more dovish; in fact the higher interest rate environment in the US is partly to blame for the new banking crisis).

It is a bit remarkable that Bank Indonesia didn’t follow the Fed’s example because in earlier times it had to follow the Fed’s example to prevent too much capital outflows from Indonesia amid higher interest rates in the USA. However, over the past two months Bank Indonesia has felt confident enough to divert from that trend (despite experiencing some rupiah weakness throughout February and at the beginning of March 2023).


This is the introduction of the article. The full article is available in our March 2023 report. This report (an electronic report) can be ordered by sending an email to or a message to +62.882.9875.1125 (including WhatsApp).

Take a glance inside the report here!

Price of this report:

Rp 150,000
USD $10,-
EUR €10,-