Bank Indonesia Left Policy Rate at 6.5%

March 4, 2010

Indonesian monetary policy will remain steady as expected.  The policy rate has been at 6.5% since 300 basis points of easing between December 2008 and August 2009 were completed.  No increase is anticipated until at least midyear.  Although economic growth has firmed faster than anticipated, core inflation fell in February, and both it (3.9%) and total CPI inflation of 3.8% are below the target range of 5% give or take a percentage point.  A new statement from Bank Indonesia officials reaffirmed the belief that current policy settings will be consistent with in-target inflation and noted a desire for quicker bank lending growth to sustain the recovery.  The statement also noted Indonesia’s large current account surplus.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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