Bank Indonesia

April 21, 2016

Having implemented 25-basis point cuts in the BI rate in each month of last quarter, Indonesia’s central bank board of governors kept the rate unchanged at 6.75% at its April monthly meeting.  There was also an earlier 25-basis point cut in February 2015, so the current level is a full percentage point lower that the brief cyclical peak of 7.75% between November 2014 and February 2015 but a percentage point above its end-2012 level.  In a released statement, officials mention a recent drop in inflation, observe even lower 3.5% inflation, and predict in-target (3-5%) inflation much of this year.  The balance of payments is improved, the rupiah has recovered partly, and growth is hovering just north of 5.0%.  There are plans to introduce a new interest rate benchmark four months from now.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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