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At its March monetary policy meeting on Thursday, Indonesia’s central bank, Bank Indonesia (BI), cut its 7-day reverse repo rate by 25bps to 4.50%, in line with expectations. The central bank cut the interest rates for the second consecutive month in an effort to fight the economic fallout from the coronavirus outbreak.

The central bank Governor Warjiyo noted that the central bank will continue maintaining market confidence, liquidity adequacy for fx and the rupiah.

Additional comments:

Continues to closely coordinate with govt, other authorities to mitigate covid-19 impact on stability, economy.

To continue updating and briefing the public every Tuesday, Thursday at 2pm local time for domestic audience, at 4pm for foreign investors.

Exports will be under pressure from slowing global growth.

Cuts 2020 economic growth forecast to 4.2%-4.6% from 5.0%-5.4%.

2021 GDP growth seen at 5.2%-5.6%.

2021 growth to be supported by fiscal, monetary stimulus.

Q1 balance of payments seen “remaining good”, with capital outflows compensated by smaller current account deficit.

Sees 2020 and 2021 c/a deficit at 2.5%-3% of GDP.

Continues to strengthen measures to stabilise rupiah along with market mechanism.

Continues triple intervention in spot, domestic NDF and bond markets.

To coordinate with other authorities to ensure 2020 inflation YoY will remain within 2%-4% target range.

Monetary policy remains accommodative and pre-emptive to maintain economic growth momentum.