Bank Indonesia Keeps Rates Steady Amid Middle East Tensions
Bank Indonesia kept rates at 4.75 percent on Tuesday as the Middle East war limited room for cuts. Officials aim to support the rupiah and manage inflation.
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Indonesia's central bank kept its key interest rates unchanged on Tuesday, signaling that the ongoing conflict involving Iran has limited the room for monetary easing. Bank Indonesia held the benchmark seven-day reverse repurchase rate at 4.75%, matching the expectations of most economists. The overnight deposit and lending facility rates were also maintained at 3.75% and 5.50%, respectively. Governor Perry Warjiyo noted that the geopolitical situation in the Middle East is the primary reason the bank has moved away from suggesting future rate cuts.
"The impact of this Middle East war is indeed why we no longer convey the possibility of an interest rate cut in this statement."
