After a two-day Board of Governors meeting on Tuesday, the central bank maintained its policy rate – the seven-day reverse repo rate – at 4.5 percent. Lending and deposit rates were also kept at 5.25 and 3.75 percent, respectively.
The central bank now expects the economy to grow 2.3 percent this year, sharply down from a range of 5.1 percent to 5.5 percent projected earlier. Under the worst-case scenario, however, BI expects the economy to contract by 0.4 percent, similar to the government’s projection, after the country recorded 5.02 percent growth last year.
The rupiah had gained around 4 percent since the end of March to Rp 15,645 per US dollar as of 3.30 p.m. Jakarta time on Tuesday. The currency started to appreciate after the government sold dollar-denominated bonds worth $4.3 billion and BI announced a $60 billion repo line with the US Federal Reserve.