ANL 14.51 Increased By ▲ 0.13 (0.9%)
ASC 13.30 Increased By ▲ 0.10 (0.76%)
ASL 14.00 No Change ▼ 0.00 (0%)
BOP 8.37 Increased By ▲ 0.02 (0.24%)
BYCO 6.50 Increased By ▲ 0.05 (0.78%)
FCCL 17.80 Increased By ▲ 0.12 (0.68%)
FFBL 26.00 Decreased By ▼ -0.01 (-0.04%)
FFL 11.15 Decreased By ▼ -0.08 (-0.71%)
FNEL 10.72 Increased By ▲ 0.03 (0.28%)
GGGL 14.90 Decreased By ▼ -0.35 (-2.3%)
GGL 31.40 Increased By ▲ 0.55 (1.78%)
HUMNL 6.22 Decreased By ▼ -0.21 (-3.27%)
JSCL 17.00 Decreased By ▼ -0.10 (-0.58%)
KAPCO 31.48 Increased By ▲ 0.68 (2.21%)
KEL 3.20 Decreased By ▼ -0.03 (-0.93%)
MDTL 2.20 Decreased By ▼ -0.05 (-2.22%)
MLCF 33.80 Increased By ▲ 0.55 (1.65%)
NETSOL 97.25 Decreased By ▼ -1.15 (-1.17%)
PACE 4.22 Decreased By ▼ -0.10 (-2.31%)
PAEL 23.00 Decreased By ▼ -0.06 (-0.26%)
PIBTL 7.43 Decreased By ▼ -0.14 (-1.85%)
POWER 6.65 Increased By ▲ 0.10 (1.53%)
PRL 13.50 Decreased By ▼ -0.30 (-2.17%)
PTC 8.90 Increased By ▲ 0.03 (0.34%)
SILK 1.30 Decreased By ▼ -0.06 (-4.41%)
SNGP 39.66 Decreased By ▼ -0.14 (-0.35%)
TELE 16.40 Decreased By ▼ -0.45 (-2.67%)
TRG 87.40 Decreased By ▼ -1.50 (-1.69%)
UNITY 25.22 Decreased By ▼ -0.24 (-0.94%)
WTL 2.10 Decreased By ▼ -0.03 (-1.41%)
BR100 4,519 Increased By ▲ 21.96 (0.49%)
BR30 18,277 Decreased By ▼ -62.37 (-0.34%)
KSE100 44,114 Increased By ▲ 178.41 (0.41%)
KSE30 17,034 Increased By ▲ 94.74 (0.56%)

Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,704
724hr
Pakistan Cases
1,283,886
41124hr
0.92% positivity
Sindh
475,097
Punjab
442,876
Balochistan
33,471
Islamabad
107,601
KPK
179,888
Markets

Indonesia central bank holds key rates at final meeting of 2020

  • He maintained an outlook of 4.8pc-5.8pc GDP growth in 2021, compared with 1pc-2pc contraction this year.
17 Dec 2020

JAKARTA: Indonesia's central bank kept interest rates steady on Thursday, holding fire after cutting five times this year and launching quantitative easing, but pledged to use all its instruments to going forward to support a pandemic-hit economy.

Bank Indonesia (BI) held the 7-day reverse repurchase rate at 3.75pc, a record low for the benchmark BI adopted in 2016 and as expected by most analysts in a Reuters poll.

Elsewhere in Asia, central banks in Taiwan and in the Philippines also left their key rates steady on Thursday.

In a virtual briefing, BI Governor Perry Warjiyo prodded banks to cut lending rates further to support the economy.

"Ample liquidity as well as reduction of the benchmark rate have contributed to the lowering of savings and lending rates ... However, BI views the reduction in banks' interest rates to be slow," said Warjiyo.

BI data showed commercial bank lending contracted 1.39pc in November. This was the weakest since at least 2002, according to Refinitiv, and came despite the 125 bps cuts in BI's benchmark rate this year and 694.9 trillion rupiah ($49.34 billion) liquidity injection.

Southeast Asia's largest economy has suffered its first recession in over two decades as the pandemic hit consumption, business activity and jobs in the country with the highest COVID-19 caseload in the region.

The "abysmal" contraction in November loan growth was "indicative of the rather deep malaise in business and consumer confidence", said OCBC Bank analyst Wellian Wiranto, who expects BI to cut rates further in 2021.

Governor Warjiyo reiterated a commitment to use all of BI's instruments to support economic recovery, but underlined that the unrolling of a vaccination programme and sticking to coronavirus health protocols were a prerequisite for growth.

He maintained an outlook of 4.8pc-5.8pc GDP growth in 2021, compared with 1pc-2pc contraction this year.

Budi Hikmat, director of Bahana TWC Investment Management, praised BI's decision to hold rates as "preserving bullets for next year", while chiding banks for pouring excess liquidity into government bonds instead of lending.

Commercial banks' ownership of government bonds surged to 37.4pc as of Dec. 15, from 22.6pc at the start of the year, overtaking foreign investors as the top holders of government bonds.

The share held by foreigners declined from 38.6pc to 25.2pc during the same period.

The rupiah, which has been stable in recent weeks, closed slightly firmer after the rate announcement, while the main stock index erased earlier gains.

In a separate call with investors, the governor said the rupiah was about 10pc undervalued.

We love hearing your feedback, please help us improve by answering these few survey questions

Comments

Comments are closed.