Indonesia central bank leaves interest rates unchanged

JAKARTA (Reuters) – Indonesias central bank held interest rates unchanged on Thursday and stuck by its message that previous hikes were sufficient to steer inflation back to within target later this year.

Bank Indonesia (BI) left unchanged its benchmark 7-day reverse repurchase rate at 5.75%, where it has been since January, as predicted by all 30 economists polled by Reuters.

BIs other main policy rates for overnight deposit and lending were also kept steady at 5.00% and 6.50%, respectively.

Governor Perry Warjiyo played down concerns about risks to Indonesian banks from problems at some global banks and said a government stress test showed domestic lenders were resilient.

Warjiyo said BIs rate hikes – totalling 225 basis points between August to January – were adequate to ensure headline inflation returned to its target range.

Headline inflation in Southeast Asias largest economy picked up slightly to 5.47% in February.

BI said inflation was on track to get back within its 2% to 4% target range from September this year, while core inflation would stay within target the whole year.

The central bank kept its economic growth outlook for 2023 at the upper end of a 4.5% to 5.3% range.

(Reporting by Gayatri Suroyo, Fransiska Nangoy and Stefanno Sulaiman; Editing by Ed Davies and Martin Petty)