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At its May monetary policy meeting held on Tuesday, Indonesia’s central bank, Bank Indonesia (BI), left its 7-day reverse repo rate unchanged at 4.50%, contradicting expectations of a 25bps cut.

The central bank maintained the status-quo for the third straight meeting to assess the impact of the coronavirus pandemic.

Governor Warjiyo noted that the April data shows economic growth slowdown continues.

Additional comments

Cuts 2020 GFP growth forecast to be lower than earlier forecast.

2021 GDP growth seen rebounding.

Q1 c/a deficit seen at smaller than 1.5% of GDP.

Net portfolio inflow $4.1 bln between April to May 14.

Current account deficit in 2020 seen smaller than 2% of GDP, vs previous forecast of 2.5%-3% of GDP.

Rupiah exchange rate recently still undervalued.

2020 inflation Y/Y to remain within 2%-4% target range.

Banking liquidity condition remains adequate.

Liquidity injection so far at 583.5 trln rupiah.

To continue ensuring banks have enough liquidity amid rising loan restructuring.