Bank Indonesia
October 7, 2014
Between June 2013 and October 2013, the BI interest rate was lifted five times by a total of 175 basis points to its current level of 7.5%. A statement released after this month’s regularly scheduled Board of Governors meeting concedes that GDP will expand only at the lower end of the range previously predicted, notes that CPI inflation has lately fallen more than assumed, and observes that the rupiah has recently declined mainly in reaction to general strength in the U.S. currency. Officials are rejecting the temptation to cut interest rates, preferring to instead maintain existing vigilance in the face of “several risks that emerge from domestic and external, such as contagion risk stemming from the normalization of the Federal Reserve policy as well as possibilities for adjustment of administered prices.”
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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