Bank Indonesia is expected to keep its benchmark interest rate at a record low on a bleak economic outlook. The central bank will likely hold its seven-day reverse repurchase rate unchanged at 3.5% for a sixth straight meeting this month. BI has previously reaffirmed that it would maintain a “pro-growth” stance until the economy stabilizes from the shock caused by the COVID-19 pandemic.
Indonesia escaped a recession in the second quarter of 2021, but the government reimposed restrictions after the highly infectious COVID-19 delta variant caused daily cases to spike and made the country a new hot spot for the disease. Meanwhile, the US Fed has signalled a more bullish tone which could add selling pressure on Rupiah that is already beset by foreign outflows. Hence, BI is unlikely to deliver further rate cuts, analysts said.
