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Investing.com -- The central bank of Indonesia has decided to maintain its rates, despite the slowing growth that could potentially justify a rate cut.
The decision is likely driven by a desire to provide support to the rupiah and to observe the development of U.S. tariffs.
On Wednesday, Bank Indonesia held its benchmark seven-day reverse repo rate at 5.75%. This decision was widely expected, as a Wall Street Journal poll had unanimously predicted the continuation of the current rate.
In addition to the benchmark rate, the central bank also kept its overnight deposit facility rate at 5.00% and its lending facility rate at 6.50%.
Bank Indonesia Governor Perry Warjiyo explained during a press conference that the decision aligns with the bank’s efforts to keep inflation within the target range, support economic growth, and stabilize the rupiah.
The decision comes at a time of escalating tensions between the U.S. and China, along with uncertainties regarding tariffs. Considering these global economic factors, Bank Indonesia anticipates that the country’s economic growth for 2025 will be slightly below the midpoint of the target range, which is set between 4.7% and 5.5%.
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