Indonesia c.bank holds rates amid growing COVID-19 crisis

Exports have also been stronger than expected on the back of the global economic recovery and high commodity prices, Warjiyo said, noting that he expected GDP growth to slow in the third quarter, but then accelerate in the October-December quarter.

"We see a potential for even higher growth than 3.9% if supported by quicker vaccination efforts so we reach herd immunity sooner," he said, adding that fiscal spending could also boost the outlook.

He told an interview with CNBC Indonesia after the conference that 2022 GDP growth is seen in a range of 4.6% to 5.4%.

Southeast Asia's largest economy shrank 2.1% last year, its first full-year contraction since 1998.

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The rupiah, which gained ahead of BI's announcement, barely moved after the decision, while the main equity index extended gains and ended the session 1.8% up. The currency has been weakening over the past week amid concerns that coronavirus curbs could derail the economic recovery.

"The main reason rate cuts are unlikely is worries about the currency," said Capital Economics in a note, expecting no change in rates until the end of next year.

ING economists also predicted an extended pause deep into 2022, although they noted the rupiah will likely be under pressure during bouts of investor aversion to riskier assets.

BI has cut interest rates by a total of 150 basis points and injected over $57 billion of liquidity into the financial system since the pandemic began early last year.