Indonesia Monetary Policy


Central Bank leaves policy rate unchanged, lowers growth forecast

At its 12 July monetary policy meeting, the Central Bank left its BI rate unchanged at a record low 5.75% for the fifth straight month, in a move that was expected by the market. Bank Indonesia upheld its decision by stating that the current policy rate is consistent with inflation forecasts. The Central Bank noted that the uncertainty regarding global economic growth has begun to affect the country's external sector and, therefore, the economy "is expected to chart lower growth relative to previous forecast". Accordingly, the Bank lowered its projection for 2012 economic growth to a range of between 6.1%-6.5% (previously: 6.3%-6.7%). Regarding price developments, policy makers underlined that inflation remains "in check" and is expected to stay within the Bank's target range of 4.5% plus/minus 1% going forward


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Indonesia Monetary Policy Chart

Indonesia Monetary Policy July 2012

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

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