In line with expectations, the central bank of Indonesia (Bank Indonesia) decided to leave its benchmark interest rate – the BI 7-Day Reverse Repo Rate – unchanged at 6.00 percent, while also maintaining its deposit facility and lending facility rates at 5.25 percent and 6.75 percent, respectively, at the two-day monthly monetary policy meeting that was held on 19 and 20 June 2019.
Despite the US Federal Reserve having been dovish since late-2018 (and will likely cut its key rate in the foreseeable future), Bank Indonesia saw no opportunity to lower interest rates at its latest meeting because external conditions have remained uncertain, while Indonesia’s current account deficit widened in the first quarter of 2019.
This article discusses the following:
• Why Bank Indonesia left its interest rates unchanged
• Bank Indonesia's decision to cut the reserve requirement for banks
• Bank Indonesia's near-future outlook (of the Indonesian economy)
Read the full article in the June 2019 edition of our monthly research report. You can purchase the report by sending an email to email@example.com or a WhatsApp message to the following number: +62(0)8788.410.6944
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