Indonesia Central Bank Continues to Keep Interest Rates Unchanged

Surprise Decision from Indonesia's Central Bank

Indonesia's Central Bank has decided to keep the policy interest rate unchanged, contrary to market expectations. Expectations were that the interest rate would be cut by 250 basis points; however, the central bank maintained the interest rate at %4.75.

Interest Rate and Economic Situation

It is notable that the policy interest rate in Indonesia has remained at its lowest level since September 2022. This decision was made after the country's foreign exchange reserves fell to 14-month lows in September due to negative developments in economic data. The central bank faces limited room to support the rupiah in the current situation.

Foreign Exchange Reserves and Market Reaction

The rupiah's ability to show resilience against the dollar this month is seen as a positive development. However, economists continue to expect potential downward pressure due to capital outflows. This situation is a point that requires careful monitoring by investors and analysts.