BANK INDONESIA / BI - JAKARTA. Indonesia's central bank kept interest rates unchanged at its first policy meeting of the year, noting the country's economic cycle had past its lowest point though it left the door open for further "accommodative" policies when conditions allow.
Bank Indonesia (BI) held the benchmark 7-day reverse repurchase rate unchanged at 5.00%, as expected by most of the analysts polled by Reuters, viewing current policy as conducive to anchoring inflation, supporting economic growth and maintaining financial market stability.
"The economic cycle in Indonesia has passed its lowest point and will continue to improve," Governor Perry Warjiyo said, adding that upward momentum would be supported by global growth and higher export demand, including for Indonesian commodities.
Twenty-two out of 25 economists in a Reuters poll had expected BI to hold the key rate steady at 5.00% on Thursday, while only three had anticipated a 25 basis point cut.
BI had cut the key rates four times last year for a total of 100 basis points to help support sluggish economic growth. It has also cut bank reserve requirements and relaxed some lending rules to boost credit growth.
Loan growth, however, has remained stubbornly slow. Official data showed that loan growth slowed to 6.08% in December, the slowest pace since November 2009, according to Eikon Refinitiv data.
