"The decision carefully weighs the need to maintain exchange rate stability against a backdrop of global financial market uncertainty," BI said in a press statement on Tuesday, May 19, 2020.
"Bank Indonesia acknowledges sufficient room to lower interest rates in line with mild inflationary pressures and the need to stimulate economic growth, particularly in 2020," it added.
Furthermore, the central bank has continued to strengthen its policy mix currently oriented towards mitigating the risks associated with covid-19, maintaining money market and financial system stability as well as acting in synergy with the government and other relevant authorities to accelerate the national economic recovery.
BI has also taken addition measures, such as providing liquidity for the banking industry in terms of restructuring MSME loans and ultra-micro enterprises with formal loans, considering implementation of Reserve Requirement Remuneration for all banks, strengthening monetary operations and Islamic financial market deepening, and accelerating implementation of the digital economy and finance as part of the national economic recovery efforts through collaboration between the banking industry and FinTech to expand MSME and public access to economic and financial services.
"Moving forward, Bank Indonesia will continue to monitor global economic and financial market dynamics as well as covid-19 transmission and the economic impact on Indonesia over time, while implementing the coordinated follow-up policies required with the Government and Financial System Stability Committee to maintain macroeconomic and financial system stability and support the national economic recovery," it stated.