Jakarta: The global economic recovery is proceeding as expected amidst lower global financial market uncertainty, Bank Indonesia (BI) Governor Perry Warjiyo has stated.
Such developments are attributable to a stronger US economic recovery, coupled with economic gains in China and several European countries in line with the orderly vaccination rollout and ongoing policy stimuli.
Meanwhile, India's economy is expected to continue moderating as mobility restrictions are expanded to break the surge of Covid-19 cases.
Various early indicators in May 2021 confirmed increasing global economic recovery momentum based on the upward Purchasing Managers Index (PMI), rising consumer confidence and retail sales in several countries.
In addition, world trade volume and international commodity prices are tracking upward trends.
On the other hand, global financial market uncertainty is easing after the US Federal Reserve clarified its accommodative policy direction and viewed that it was too early for tapering.
The Fed will continue to purchase securities until substantial developments in terms of inflation and employment are observed.
"The positive tone pushed global capital flows to developing economies, including Indonesia, and led to local currency appreciation," said the BI Governor during a press conference here on Thursday.
On Thursday afternoon, The BI Board of Governors Meeting announced its decision to hold the BI 7-Day Reverse Repo Rate at 3.50%, while also maintaining the Deposit Facility (DF) rates at 2.75% and Lending Facility (LF) rates at 4.25%.
According to the central bank, the decision is consistent with projected low inflation and efforts to maintain Rupiah exchange rate stability, while boosting the economic recovery.
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