Indonesia Keeps Key Rate Unchanged at 4.75%

The Bank Indonesia held its key interest rate steady at 4.75 percent at its November meeting as expected after two-25bps cuts in the previous two months. The central bank also kept its lending facility rate unchanged at 5.5 percent and its overnight deposit facility rate at 4.0 percent. Policymakers said the decision was taken in their response to maintain domestic economic growth.

The central bank mentioned an 'escalating' global economic uncertainty in global financial markets after the US election and said that it will continue to intervene in the foreign exchange market to keep rupiah stable against the dollar. The rupiah weakened sharply after presidential elections in the US due to capital outflows but stabilized after the central bank intervention.

Going forward, poliymakers said the Indonesian economy is expected to expand 5 percent this year and between 5 percent to 5.4 percent next year and inflation is seen in the range of 3 percent to 5 percent in 2017.  

Bank Indonesia l Aloysius Unditu |
11/17/2016 11:29:30 AM