Indonesia keeps interest rates unchanged for third straight time

Illustrative image (Photo: Reuters)

Hanoi (VNA) - The Bank Indonesia (BI) announced at its meeting on April 18 it will keep its benchmark interest rates unchanged for a third straight time, predicting headline inflation would be back within its target sooner.

The Southeast Asia's biggest economy has been supported by a commodities-led export boom, though economists expect a slowdown in growth as tighter monetary policies across the world weigh on global demand.

BI Governor Perry Warjiyo said maintaining the interest rate at 5.75% as expected is aimed at maintaining macroeconomic stability. The current benchmark rate is still sufficient to keep core inflation within BI's target range of 2-4%.

Last month, inflation was already at 4.9%, but it will continue easing, he said, adding that starting August, it could be below 4%. BI previously expected headline inflation to return to target in September.

Meanwhile, with sentiment for riskier assets improving amid market forecasts that US rates are near their peak, the rupiah has strengthened by almost 4% in the past month, even with some depreciation this week.

The central bank kept its 2023 GDP growth outlook at the upper end of 4.5%-5.3% range./.