Indonesia's central bank, Bank Indonesia, kept the BI reference rate on hold at 6.75%. The Bank said: "Bank Indonesia views that the current BI rate level is still consistent with efforts to maintain macroeconomic and financial stability as well as to support stronger economic growth. Bank Indonesia is confident that the impact of the recent turmoil in the global financial markets because of the U.S. credit rating downgrade to the domestic financial market is limited, and can be contained with continuous monitoring of market development and coordination with the government".
At its July meeting, the Bank also maintained the key monetary policy rate (the BI Rate) unchanged at 6.75%. Previously the Bank raised the BI rate by 25 basis points to the current 6.75% in February 2011. Indonesia reported annual inflation of 5.98% in May, compared to 6.16% in April, and 6.65% in March, and just inside the inflation target of 5% +/-1% in 2011 (which changes to 4.5% +/-1% in 2012). Bank Indonesia is forecasting GDP growth of 6.3-6.8% in 2011 and 6.4-6.9% in 2012 for the Indonesian economy, meanwhile Indonesia reported economic growth of 6.5% in the June quarter this year.