JAKARTA: Indonesia’s central bank on Tuesday announced more aggressive hikes in the reserve requirement ratio (RRR) for banks, expecting inflation to rise slightly above its target band this year, but kept interest rates unchanged at a record low.
Bank Indonesia (BI) announced a quicker pace in RRR hikes, ordering banks to park 7.5% of their reserves starting July and 9% from September. This compared with BI’s previously announced policy path, in which BI had set three staggered RRR hikes this year from 3.5% to 6.5% in September.
BI left the benchmark 7-day reverse repurchase rate at a record low of 3.50%, as…
