C.bank maintains benchmark rate at 3.50% for 7th straight review, for benchmark rate is 55%.
JAKARTA, Sept 21 Reuters - Indonesia's central bank left its main policy rates steady at a record low on Tuesday, saying the decision was in line with the need to support the economy while keeping the rupiah currency stable.
Bank Indonesia BI kept the benchmark 7 day reverse repurchase rate at a record low of 3.50% for a seventh straight policy review, as expected by all 25 analysts in a Reuters poll.
While the central bank said domestic activity picked up after a recent easing of coronavirus curbs, the central bank kept its growth target range unchanged at 3.5% to 4.3% until 2021, after a downgrade in July.
The decision is in line with the need to ensure a stable exchange rate amid low inflation and efforts to support economic growth, Governor Perry Warjiyo told in a streamed news conference.
The rupiah rose slightly after the rate decision.
The currency has come under pressure in recent months on expectations that the U.S. Federal Reserve may soon begin to taper its bond purchases. It has gained almost 1% since its last meeting with BI, but is still down 1.4% the year.
Despite Warjiyo saying it expected Fed tapering to start in November, he reiterated he did not expect Indonesia to be affected as during the 2013 taper tantrum when the rupiah lost more than 20% of its value against the dollar.
Warjiyo said the rupiah has a tendency to strengthen or at least remain stable as the economic outlook brightens, capital inflows continue and the country's external balance improves.
In the second quarter, the largest economy of Southeast Asia pulled out from recession.
While the recovery momentum was hit by fresh mobility restrictions in July and August of this year, the central bank said domestic activity has gradually improved since curbs were eased in late August.
The economic outlook has improved since the last meeting of BI, which indicates there is little need for further easing, said Gareth Leather, an economist at Capital Economics.
Since the pandemic started BI has cut interest rates by a total of 150 basis points and has launched a quantitative easing programme.