JAKARTA - Oct 19 Reuters - Indonesia's central bank controlled its policy rates steady at record lows on Tuesday, saying the decision was in line with the need to support the economic recovery while keeping the rupiah stable.
Bank Indonesia BI held the benchmark reverse repurchase rate of 7 days at 3.50% for the eighth straight month. Indonesia's economy expanded in the second quarter of 2021 at the fastest pace, but the recovery was clouded by an outbreak in July - one of the worst resurgences of COVID - 19 in Asia - that forced authorities to reimpose restrictions.
While the domestic recovery was buoyed by higher exports and improving consumption after recent easing of coronavirus curbs, the central bank stuck to its forecast for 3.5% to 4.3% growth this year.
BI also said the global recovery was expected to be more subdued than previously estimated due to rising COVID - 19 cases and higher energy prices, also noting that disruptions to the global supply chain needed to be monitored.
The central bank said it will continue to enforce the economic core of the currency reflects modern fundamentals.
The rupiah has gained about 1.1% against the dollar since the last meeting with the BI on the back of robust commodity exports but is down 0.3% on the year.
A stronger rupiah also gave BI some room to keep monetary policy accommodative. Talk of U.S. tapering weighed on the rupiah earlier in the year, and some analysts had worried that further BI easing could add downward pressure on the currency.
Since pandemic started BI has cut interest rates by a total of 150 basis points and has launched a quantitative easing programme.