Indonesia Monetary Policy


Bank Indonesia maintains interest rate unchanged at 5.75% in May

At its 14 May monetary policy meeting, the Central Bank left its BI rate unchanged at a record-low 5.75% for the 15th straight month, in a move that was widely expected by the market.

Bank Indonesia stated that economic growth slowed in the first quarter amid declining domestic demand and only a partial recovery in exports. At the same time, monetary authorities noted an improvement in the current account deficit, thanks to an improved trade balance. Regarding price developments, the Central Bank reassured that inflation is to remain within the Bank's target range in the medium term but warned that inflation expectations are rising driven by uncertainty regarding the government's fuel subsidy policy.

FocusEconomics Consensus Forecast panellists see the BI rate at 5.97% by the end of 2013. For 2014, panellists expect the BI rate to rise to 6.24%.


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Indonesia Monetary Policy Chart

Indonesia Monetary Policy May 2013

Note: BI rate in %.
Source: Bank Indonesia.

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