Money in Indonesia
Indonesia - Money
Central Bank stands pat in September
At its monetary policy meeting held on 20–21 September, Bank Indonesia (BI) decided to leave the seven-day reverse repo rate at the all-time low of 3.50%, where it has been since February. The move was widely expected by market analysts.
The Bank’s decision to stand pat was motivated by its commitment to support the local currency as well as the recovery, which is expected to have resumed following a slowdown in July amid spiking daily Covid-19 infections and the reintroduction of restrictions. Meanwhile, price pressures are limited, with inflation remaining below 2.0% in July–August, providing the Bank with room to maintain its accommodative stance. That said, BI expects the headline reading to return to and remain within the 2.0%–4.0% target range going forward.
Looking ahead, BI maintained its dovish tone in its communiqué, pledging to stick to a supportive monetary stance and reiterating its commitment to “maintain macroeconomic and financial system stability and support further economic improvement efforts”. All of our panelists see the seven-day reserve repo rate ending 2021 at 3.50%.
Regarding the outlook for monetary policy, Nicholas Mapa, senior economist at ING, commented:
“The recent Delta Covid-19 wave forced authorities to deploy mobility restrictions in July and part of August, weighing on overall growth momentum. With daily infections now more under control, the economy has gradually reopened with authorities hoping to get growth back on track. With inflation below the Central Bank’s 2.0%–4.0% target, we expect Governor Warjiyo to have all the necessary space to retain his “pro-growth” stance to support the recovery. We believe that BI will keep rates untouched for the balance of 2021 given the current inflation and growth situation.”
The next meeting is scheduled for 18–19 October.
The Consensus is for the seven-day reserve repo rate to end 2021 at 3.50% and 2022 at 3.93%.
Indonesia - Money Data
|Money (annual variation in %)||9.0||10.0||8.3||6.3||6.5|
5 years of economic forecasts for more than 30 economic indicators.
Indonesia Money Chart
Source: Bank Indonesia.
|Bond Yield||7.10||-0.05 %||Dec 31|
|Exchange Rate||13,883||0.05 %||Jan 01|
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October 15, 2021
Retail sales declined 2.1% compared to the same month of the previous year in August, which was above July's 2.9% decrease.
October 15, 2021
Merchandise exports shot up 47.6% in annual terms in September, following August’s 64.1% upturn.
October 1, 2021
Consumer prices dipped a seasonally-adjusted 0.04% over the previous month in September, contrasting the 0.04% rise logged in August.
October 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) jumped to 52.2 in September, from August's 43.7.
September 22, 2021
At its monetary policy meeting held on 20–21 September, Bank Indonesia (BI) decided to leave the seven-day reverse repo rate at the all-time low of 3.50%, where it has been since February.