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Indonesia’s central bank, Bank  Indonesia  (BI), left its benchmark 7-day reverse repo unchanged at 3.50% at its April  monetary policy  meeting held this Tuesday.

The central bank governor Perry Warijyo said that exports and fiscal stimulus support the GDP recovery.

Additional comments

Global economic recovery seen stronger than initially anticipated.

Financial market uncertainty and volatility of UST yields still happening.

Uncertainty impacts EM currencies, including rupiah.

Country’s exports seen better than initially expected.

Domestic consumption still limited.

Revises 2021 GDP outlook to +4.1% to +5.1%.

Q1 c/a deficit seen low.

Keeps 2021 c/a deficit estimate at 1% to 2% of GDP.

Rupiah exchange rate relatively manageable after stabilisation efforts.

Continues to strengthen measures to stabilise rupiah.

2021 inflation y/y seen within 2%-4% target range.

Quantitative easing since 2020 amounting to 798.85 trln rupiah.

2021 bond purchase in primary market amounting to 101.91 trln rupiah.

FX implications

The Indonesian Rupiah (IDR) showed little reaction to the expected no-rate change decision by the BI.

At the time of writing, USD/IDR trades at 14,505, shedding 0.25% on a daily basis.