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Indonesian central bank raises interest rate for sixth time

Indonesia’s central bank on November 15 decided to raise its benchmark interest rate for the sixth time this year to lower the country’s yawning current-account deficit.
Indonesian central bank raises interest rate for sixth time ảnh 1Illustrative photo (Photo: energitoday.com)

Jakarta (VNA) - Indonesia’s central bank on November 15 decided to raise itsbenchmark interest rate for the sixth time this year to lower the country’syawning current-account deficit.

Bank Indonesia (BI) raised its 7-day reverse repurchase rateby 25 basis points to 6 percent. Seventeen of 19 analysts participating in aReuters poll forecast that the bank will keep the interest rate unchanged at theupcoming conference.

The key rate has now been hiked six times by a total of 175basis points since May, as BI tried to slow capital outflows triggered byrising US rates and aimed to put a floor under the fragile rupiah.

BI Governor Perry Warjiyo said theIndonesian Government is making efforts to stabilise the monetary market. Thelocal currency has seen a strong recovery since early November thanks toconfidence in the improvement in the global economic prospects. However, it is facinga risk of depreciating again.

In addition, the Indonesiangovernment also plans some other measures to improve the domestic currency andreduce inflation such as increasing import taxes, postponing important infrastructureprojects and encouraging the wide use of biofuels.

Indonesia’s trade deficit in October soared more than expected, standing at1.82 billion USD due to increasing imports.-VNA
VNA
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