JAKARTA, March 17 - Bank Indonesia held its key interest rate at 4.75%, citing limited room for cuts due to the Middle East war’s economic fallout.
Governor Perry Warjiyo said the central bank will maintain rates to strengthen foreign exchange intervention and support the rupiah, which has hovered near record lows of 17,000 per dollar.
The bank also plans to tighten currency transaction rules next month. Inflation stood at 4.76% in February-well above BI’s 1.5%-3.5% target-though officials blame temporary electricity tariff discounts and expect a return to target soon.
Despite global growth risks from the Iran conflict, BI kept its 2025 GDP forecast unchanged at 4.9%-5.7%.
Economist Radhika Rao of DBS noted that subdued risk appetite could keep rate cuts off the table for the rest of the year.