* Benchmark kept at record low of 3.50% as expected
* Governor says global recovery stronger than expected
* But trims 2021 domestic GDP forecast to 4.1%-5.1% from
* Says to keep strengthening measures to support rupiah
JAKARTA, April 20 (Reuters) - Indonesia's central bank kept
its main policy rate at a record low on Tuesday and trimmed its
2021 growth forecast for Southeast Asia's largest economy, while
pledging to strengthen measures to keep the rupiah currency
Bank Indonesia (BI) left the benchmark 7-day reverse
repurchase rate at 3.50%, where it has been since
February and as expected by all 27 analysts in a Reuters poll.
Governor Perry Warjiyo said a global economic recovery had
been stronger than initially anticipated, underpinning demand
for Indonesia's exports, but warned domestic consumption
remained muted due to mobility restrictions to control the
BI's forecast for economic growth this year was trimmed to
4.1%-5.1% from 4.3%-5.3% previously.
"Consumption is also improving according to various
indicators ... but the level of improvement, based on the latest
data, is lower than our earlier expectation," Warjiyo told a
streamed news conference.
BI would keep strengthening measures to stabilise the
rupiah, he said. Indonesia's currency has been caught up in a
broad sell-off in risk assets over the past two months, driven
by rising U.S. inflation expectations and U.S. Treasury yields.
The rupiah has firmed slightly in recent days but
remains one of the worst performing currencies in emerging Asia,
with losses of 3.1% so far this year.
The currency gained slightly after the policy announcement
and Warjiyo said he believed the rupiah would continue to
strengthen on portfolio inflows.
"The current (rupiah) exchange rate and government bond
yields are attractive and that's why we've seen capital inflows,
especially to the bond market, albeit not yet big," he added.
After suffering its first full-year contraction in over two
decades in 2020, the economy is expected to post its first
positive growth in five quarters in April-June as mass
vaccination is rolled out, the government has said.
BI has cut interest rates by a total of 150 basis points,
pumped 798.85 trillion rupiah ($55.11 billion) liquidity into
the financial system and relaxed lending rules since 2020 to
help Indonesia weather the COVID-19 pandemic.
Warjiyo said BI would focus on accelerating the transmission
of past policy easing onto bank lending and supporting the
country's digital payment system to bolster the economic
"BI will leave the benchmark unchanged for the foreseeable
future, being mindful to not exacerbate IDR depreciation further
amid the uptrend in inflation," Wisnu Wardana, Bank Danamon
Analysts in the Reuters poll predicted BI would keep rates
on hold for the rest of the year, with some expecting rate hikes
at the beginning of 2022.
BI officials have said rates would be kept low until signs
of inflationary pressure emerge. Inflation hit a seven-month low
of 1.37% in March, but BI expected a further rise this year to
within a 2% to 4% target range.
($1 = 14,495.0000 rupiah)
(Reporting by Gayatri Suroyo and Fransiska Nangoy; Additional
reporting by Tabita Diela; Editing by Ana Nicolaci da Costa and