Bank Indonesia Leaves Monetary Policy on Hold

Bank Indonesia decided on March 13th, 2014 to hold the benchmark interest rate steady at 7.5 percent for the fourth straight meeting, as pressures over the inflation rate and the rupiah have eased.

The deposit facility and the lending facility rate were also left unchanged at 5.75 percent and 7.50 percent, respectively. 

Between June and November last year, Bank Indonesia raised rates by a total of 1.75 percentage points to protect the rupiah, which fell nearly 21 percent against the dollar in 2013, prompted by investors’ concerns over a widening current account deficit.

But in the last quarter of 2013, the current account gap narrowed 52 percent over the previous three-month period. 

In February, the inflation rate slowed below 8 percent for the first time since October of 2013.

Bank Indonesia Leaves Monetary Policy on Hold

Joana Taborda |
3/13/2014 10:23:53 AM