At its December monetary policy meeting on Thursday, Indonesia’s central bank, Bank Indonesia (BI), left its 7-day reverse repo rate unchanged at 5.00%, meeting expectations. The central bank stood pat for the second straight month following four successive rate cuts since July.
The latest Reuters poll showed that twenty of 22 economists expected BI to hold the 7-day reverse repurchase rate steady at 5.00% on Thursday.
The central bank Governor Warjiyo noted that Indonesian Q4 GDP growth is seen supported by consumption, fiscal spending.
Additional Comments:
Q4 GDP growth seen improving, 2019 growth seen around 5.1%.
2020 economic growth seen at 5.1%-5.5%.
Current Account deficit seen still under control despite $1.3 bln November trade deficit.
2019 Current Account deficit seen at 2.7% of GDP.
2020 Current Account deficit seen at 2.5%-3% of GDP.
Rupiah expected to remain stable.
Y/Y inflation at end-2019 seen around 3.1%.
2020 Y/Y inflation seen within 2%-4% target range.
Monetary policy transmission to bank interest rates continuing but not optimal yet.
To continue making sure markets have ample liquidity.
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