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Indonesia’s central bank left its key rates unchanged on Thursday and vowed to maintain stability in the rupiah exchange rate amid global market volatility.

The Board of Governors of Bank Indonesia decided to retain the BI 7-day reverse repo rate at 3.75 percent. The bank had reduced the rate by a quarter-point in November.

The central bank retained its deposit facility interest rate at 2.75 percent and the lending facility rate at 4.25 percent.

The upshot is that interest rates are likely to remain unchanged at 3.5 percent for at least the next few months, Gareth Leather, an economist at Capital Economics, said.

The central bank said the decision was in line with the need to maintain the stability of the Rupiah exchange rate against increasing uncertainty on global financial markets. The bank said it will maintain currency stability through triple intervention.

The central bank expects the economy to grow in the range of 4.3-5.3 percent in 2021. The current account deficit was projected to remain low at around 1.0 percent to 2.0 percent of GDP in 2021.


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