Illustrative photo (Photo: energitoday.com) Jakarta (VNA) - 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.
Bank Indonesia (BI) raised its 7-day reverse repurchase rate by 25 basis points to 6 percent. Seventeen of 19 analysts participating in a Reuters poll forecast that the bank will keep the interest rate unchanged at the upcoming conference.
The key rate has now been hiked six times by a total of 175 basis points since May, as BI tried to slow capital outflows triggered by rising US rates and aimed to put a floor under the fragile rupiah.
BI Governor Perry Warjiyo said the Indonesian Government is making efforts to stabilise the monetary market. The local currency has seen a strong recovery since early November thanks to confidence in the improvement in the global economic prospects. However, it is facing a risk of depreciating again.
In addition, the Indonesian government also plans some other measures to improve the domestic currency and reduce inflation such as increasing import taxes, postponing important infrastructure projects and encouraging the wide use of biofuels.
Indonesia’s trade deficit in October soared more than expected, standing at 1.82 billion USD due to increasing imports.-VNA
VNA
