Citing foreign exchange rates, inflation and rising fuel prices, Bank Indonesia held its key interest rates unchanged on Tuesday, for the fifth-straight policy session.
Indonesia's central bank voted to maintain its key rate, the seven-day reverse repurchase rate, at 4.75%, the deposit facility interest rate at 3.75%, and the lending facility interest rate at 5.50%.
Bank Indonesia said the "decision aims to strengthen the stability of the rupiah exchange rate against the worsening global conditions due to the war in the Middle East."
The Indonesian rupiah has depreciated about 4.1% against the US dollar in the last 12 months, despite efforts by Indonesian officials to firm the currency.
In addition to a soft rupiah, Bank Indonesia central bankers are facing rising inflation, now above the central's bank's 1.5% to 3.5% inflation target band.
Indonesia's consumer price index (CPI) struck a 4.76% gain on year in February, up from 3.55% in December, and notching the highest rate of inflation since since March 2023.
Although the central bank aims to cool off the economy by pausing rate cuts, it signaled it is taking steps to maintain lending to productive enterprises.
"Meanwhile, macro-prudential policies continue to be strengthened to encourage economic growth through increased credit/financing to the real sector while maintaining the stability of the financial system," advised Bank Indonesia.
The central bank said it still anticipates relatively robust national economic growth in 2026.
The "synergy of policies between the government and Bank Indonesia, as well as other stakeholders, is being strengthened to maintain domestic demand and support economic growth within the range of 4.9% to 5.7%" for 2026," said Bank Indonesia.
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