Indonesia central bank to reduce excess liquidity in 2022, keep rates low until signs of inflation

JAKARTA: Indonesia's central bank plans to reduce the amount of excess liquidity in the banking system next year without disrupting lending, but will keep interest rates low until it sees signs of rising inflation, Governor Perry Warjiyo said on Wednesday.

Bank Indonesia cut its growth forecast for 2021, expecting the economy to expand between 3.2% and 4%, down from 3.5% to 4.3% previously, he said in an annual meeting with financial market stakeholders.

But it slightly upgraded its forecast for economic growth in 2022 to between 4.7% and 5.5%, from a range of 4.6% to 5.4% previously, Warjiyo added.