JAKARTA – Indonesia‘s central bank left interest rates unchanged for an eighth straight month on Thursday, amid renewed pressure on the rupiah currency and bond yields.
Bank Indonesia (BI) held the seven-day reverse repurchase rate steady at 5.75 percent, where it has been since January, as widely expected by 31 economists surveyed by Reuters. Its two other main rates were also kept unchanged.
The decision to hold rates was consistent with BI’s stance to ensure inflation stays within target range in 2023 and 2024, BI governor Perry Warjiyo said in a press conference.
READ: Indonesia Aug inflation at 3.27%, below expectations
The inflation target range will be lowered to 1.5 percent to 3.5 percent in 2024.
The rupiah has fallen gradually against the U.S. dollar in recent weeks to its weakest in six months, amid rising U.S. Treasury yields. Indonesian bond yields have also risen.
BI has been trying to balance currency stability with keeping inflation in check and maintaining growth momentum in Southeast Asia’s largest economy as exports fall amid softening commodity prices.
READ: Indonesia Q2 GDP growth highest in three quarters
The Indonesian currency remained emerging Asia’s best performer.
BI began offering its own notes this month in a tweak to its monetary operations, while also aiming to attract capital inflows. It sold $1.6 billion worth of notes in its maiden auction on Sept. 15.
Inflation, which peaked near 6 percent last year on high energy and food prices, returned to BI’s 2 percent to 4 percent target earlier than expected this year. In August, inflation remained close to the midpoint of the range at 3.27 percent.