Governor of the Bank Indonesia (BI) Agus Martowardojo has said the central bank will not loosen its monetary policy until the current account deficit shrinks to 2.5 percent of the country’s gross domestic product (GDP).

According to the National Statistics Office (BPS), Indonesia saw a current account deficit expansion to 4.7 percent of GDP in the second quarter of this year, much higher than the previously projected rate of 3 percent.

The bank will keep its interest rate at 7.5 percent in the remaining months of the year in a bid to curb the targeted inflation rate of between 3.5 and 5.5 percent in 2014.

However, the BI has recently forecast a bounce-back in Indonesia’s GDP, with a national economic growth of 5.1-5.5 percent in 2014 and 5.4-5.8 percent in 2015.-VNA