Bank Indonesia BI Rate Left Unchanged

June 12, 2014

The BI central bank interest rate has been 7.5% since a 25-basis point hike last November.   The level had previously not been so high since April 2009, and today’s statement affirmed the view that policy is consistent with attaining inflation objectives and a shrinking the current account deficit.  A four-year low in Indonesia’s economic growth rate appears to have outweighed recent currency depreciation and a slight uptick of inflation.  The BI rate had been at 5.75% from February 2012 until June of 2013 but was raised five times by a total of 175 basis points in the space of five months through November 2013.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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