By Ying Xian Wong
Indonesia's central bank held rates steady on Wednesday, pausing again as external uncertainties make policymakers cautious.
Bank Indonesia made the decision to keep its benchmark seven-day reverse repo rate at 5.50% amid heightened geopolitical tensions, centered around the conflict in the Middle East. The move also comes hours ahead of a decision by the Federal Reserve, adding to expectations for BI to take a wait-and-see approach.
The Indonesian central bank also maintained its overnight deposit facility rate at 4.75% and its lending facility rate at 6.25%.
The rate hold aligns with efforts to keep inflation on target, the rupiah stable and economic growth supported, Bank Indonesia Gov. Perry Warjiyo said at a press conference.
Indonesia's economic growth needs to be continuously bolstered, Warjiyo said.
Growth this year is seen at between 4.6% and 5.4%.
Economists had been split on the outcome of the BI's June meeting. Five of nine economists polled by The Wall Street Journal predicted a hold, while four expected a cut, citing a steadier rupiah and in-check inflation.
CIMB economists in a recent note said that Bank Indonesia's last rate cut in May was an opportunistic move to support diminishing growth momentum. Future decisions will be "highly dependent on conditions being right", namely the rupiah's stability and financial market clarity, they said.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
06-18-25 0350ET
