The Bank of Indonesia kept the key interest rate unchanged as expected and suspended the easing cycle when external risks impacted the Indonesian rupiah exchange rate. The Bank of Indonesia kept the benchmark interest rate unchanged at 6% on Wednesday, in line with the expectations of 30 of the 41 economists surveyed previously. The expectations of others were to cut interest rates by 25 basis points. Last month, the bank unexpectedly launched an easing cycle before the Federal Reserve took action. Central Bank Governor Perry Warjiyo said that the bank will continue to pay attention to the room for interest rate cuts, while also focusing on the prospects for CPI, Indonesian rupiah and economic growth. The decision to stand still indicates that the weakening of the Indonesian rupiah against the US dollar is a key issue for Warjiyo and his policy committee. The likely slowdown in the pace of the Federal Reserve's easing and the tense situation in the Middle East caused the Indonesian rupiah to fall by more than 2% against the US dollar this month, prompting the Bank of Indonesia to intervene for the first time in months.

The Bank of Indonesia kept the key interest rate unchanged as expected and suspended the easing cycle when external risks impacted the Indonesian rupiah exchange rate. The Bank of Indonesia kept the benchmark interest rate unchanged at 6% on Wednesday, in line with the expectations of 30 of the 41 economists surveyed previously. The expectations of others were to cut interest rates by 25 basis points. Last month, the bank unexpectedly launched an easing cycle before the Federal Reserve took action. Central Bank Governor Perry Warjiyo said that the bank will continue to pay attention to the room for interest rate cuts, while also focusing on the prospects for CPI, Indonesian rupiah and economic growth. The decision to stand still indicates that the weakening of the Indonesian rupiah against the US dollar is a key issue for Warjiyo and his policy committee. The likely slowdown in the pace of the Federal Reserve's easing and the tense situation in the Middle East caused the Indonesian rupiah to fall by more than 2% against the US dollar this month, prompting the Bank of Indonesia to intervene for the first time in months.