Indonesia: Central Bank holds policy rate in April
April 11, 2013
At its 11 April monetary policy meeting, the Central Bank left its BI rate unchanged at a record-low 5.75% for the 14th straight month, in a move that was widely expected by the market.
The Central Bank stated that the global economic recovery is still fragile as risks from the Eurozone debt crisis prevail. On the domestic economy, the Bank explained that internal demand is still robust. At the same time, however, monetary authorities expect the current account deficit to increase going forward as imports (particularly those of petroleum) remain costly amid a steadily weakening Indonesian rupiah. Accordingly, the Bank lowered its GDP growth projections for this year to a range of between 6.2% and 6.6% (previously forecasted: 6.3%-6.8%).
Regarding price developments, the Central Bank reassured that inflationary pressures are expected to subside and inflation is to remain within the Bank's target range in the medium term.
FocusEconomics Consensus Forecast panellists see the BI rate at 5.99% by the end of 2013. For 2014, panellists expect the BI rate to rise to 6.18%.