Indonesia maintains repo rate at 4¾% as global outlook improves

By Wendy Van Sickle

Columbus, Ohio, May 18 – Bank Indonesia said its board of governors again decided to hold the BI seven-day reverse repo rate at 4¾% amid low core inflation.

The Consumer Price Index posted inflation in April at 0.09% month-to-month, compared with deflation of 0.02% the previous month. Year-over-year inflation was recorded at 4.17% in April.

Administered prices, including higher airfares and rising petrol and cigarette prices, were cited as the main contributor to CPI inflation.

“The global economic outlook is improving on the back of stronger growth in the U.S., China, Europe and Japan,” the bank said in a statement, which also notes risks, including U.S. policy directions and geopolitical conditions, particularly in the Korean Peninsula.

The bank targets inflation at 4% plus or minus 1%.

As previously announced, the bank agreed to hold the BI seven-day reverse repo rate at 4¾% in April.

The deposit facility rate remains unchanged at 4% and the lending facility rate at 5½%.

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