/2021/05/27/578988196p.jpg)
But Warjiyo did not expect the impact from Fed tapering to be as big as during the 2013 so-called "taper tantrum", when capital outflows triggered a 20% fall in Indonesia's currency.
He also said BI had policy tools to deal with any fallout from tapering, such as its currency stabilisation instruments.
The rupiah, which has been gradually falling in the past two weeks amid talk of U.S. tapering, gained slightly after BI's announcement to trade down 0.2% on the day.
"The need to secure rupiah stability added to the reasons for the central bank to keep rates on hold today, coming close on the heels of the (Fed) minutes which raised the likelihood that the tapering of asset purchases might start this year," said Radhika Rao, a DBS economist.
Read Also: Gold rises as virus jitters boost safe-haven appeal
Josua Pardede, an economist with Jakarta-based Bank Permata, said he expected BI to begin withdrawing some of the liquidity surplus in the market once the Fed begins tapering its quantitative easing.
The central bank kept its 2021 growth forecast at 3.5% to 4.3%. To aid the economic recovery, Warjiyo said BI will issue rules aimed at bolstering lending to small and medium enterprises on Sept. 1.
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.
Indonesia has struggled with the worst coronavirus outbreak in Southeast Asia.
