* All 27 expect BI keeping key rate at record low of 3.50%
* All 23 giving end-year views expect no change
* BI has reduced rates by 150 bps during pandemic
* Decision due on Tuesday, April 20, around 0700 GMT
JAKARTA, April 16 (Reuters) - Indonesia's central bank is
expected leave its key policy rate unchanged at a record low for
the rest of the year to support an economic recovery, while
trying to maintain financial market stability, a Reuters poll
showed on Friday.
Bank Indonesia (BI) will keep the 7-day reverse repurchase
rate at 3.50% at a policy meeting on Tuesday, where
it has been since February, all 27 analysts surveyed by Reuters
Twenty-three of the respondents who gave longer term views
predicted no change in the benchmark for all of 2021, and some
expected BI to unwind some of its easing by the first half of
At its March meeting, Governor Perry Warjiyo noted that BI's
decision to keep the benchmark steady was to anchor the rupiah
amid global market uncertainty.
Last week, Warjiyo said he considered the rupiah "stable"
compared with other emerging market currencies, while repeating
a pledge to use all of BI's tools to support growth.
The rupiah has weakened further since, losing nearly 4% so
far this year against the U.S. dollar and trading at the lowest
BI has delivered six interest rate cuts totalling 150 basis
points, carried out a quantitative easing programme and relaxed
lending rules since 2020 to help Southeast Asia's largest
economy recover from the COVID-19 pandemic.
"BI is likely to keep rates unchanged for as long as they
can, but the likelihood going forward is for rate hikes given
potential sooner-than-expected the Fed lifting up its rates,"
said UOB economist Enrico Tanuwidjaja, who is pencilling in a
rate increase in the first quarter of 2022.
Government officials have said the economy is expected to
contract in the first three months of 2021, but Indonesia should
emerge from recession in the second quarter.
BI's forecast for 2021 GDP growth is a range of 4.3% to
5.3%, following a 2.07% contraction last year.
Still, ANZ analyst Krystal Tan said "a full-fledged recovery
is still some way away", noting that inflation was still low and
the COVID-19 vaccinations would take time.
"The upshot is that BI is likely to keep its policy rate
unchanged through 2021 as it strikes a balance between growth,
inflation and external stability concerns," she said.
(Polling by Nilufar Rizki in Jakarta and Md Manzer Hussain in
Bengaluru; writing by Gayatri Suroyo; editing by Kim Coghill)