World News

Indonesia central bank to maintain accommodative policy to bolster growth

JAKARTA (Reuters) – Indonesia’s central bank is set to continue its accommodative monetary policy this year to support economic growth, Bank Indonesia Governor Perry Warjiyo said on Wednesday.

“All Bank Indonesia’s policy instruments are focused on keeping and strengthening the economic growth momentum,” Warjiyo told a news conference.

“Accommodative monetary policy continues,” he said, a day ahead of Bank Indonesia’s monetary policy review.

A large majority of economists in a Reuters poll expect the central bank to hold the 7-day reverse repurchase rate <IDCBRR=ECI> steady at 5.00%.

Bank Indonesia (BI) has targeted the economy to grow at 5.1%-5.5% this year, a slight increase from 5.1% expected for 2019.

Last year, Bank Indonesia cut its benchmark policy rate by 100 basis points to support growth and as pressure on the currency rupiah <IDR=ID> eased.

The rupiah has gained around 1.6% so far this year to trade near its firmest in two years.

Stronger economic growth, low inflation, and foreign inflows have led to a strengthening in the rupiah, Warjio said, adding that the appreciation “reflects the credibility” of BI and the government’s policies.

The rupiah was 0.07% weaker on Wednesday morning, trading at 13,660 per dollar by 0306 GMT, as most emerging Asian currencies were hurt by concerns over the virus outbreak in China.

BI’s head of monetary management said earlier on Wednesday the central bank “stands ready” to intervene in spot foreign exchange, bonds and domestic non-deliverable forward markets to guard the stability of the rupiah.

(Reporting by Maikel Jefriando; Writing by Tabita Diela and Fransiska Nangoy; Editing by Jacqueline Wong)