Bank Indonesia Keeps 7-Day Reverse Repo Rate Unchanged At 5.75%

Indonesia's central bank keeps its benchmark interest rate unchanged at 5.75%, matching a unanimous consensus call in a Bloomberg call.

• Today's rate decision extends a pause since Bank Indonesia raised the 7-day reverse repo rate to its current level in January, bringing the cumulative amount of tightening this cycle to 225bp.
• The central bank says that it is confident that its rate policy is sufficient to manage core CPI and notes that its decision is in line with its pre-emptive, forward-looking stance, as it seeks to ensure lower inflation expectations.
• Bank Indonesia notes that it sees price pressures continuing to ease and expects headline inflation to return to the +2.0%-4.0% Y/Y range earlier than expected, with core inflation seen remaining within that band in 2023.
• The central bank will stick with its policy of stabilising the IDR to manage imported inflation. It will also continue "Operation Twist" in short-term bonds and add macroprudential incentives to boost bank lending.