Bank Indonesia Raises Rates

Bank Indonesia decided on August 29th to raise the BI Rate by 50 bps to 7 percent, in an attempt to stabilize the rupiah, amid high inflation and a stock market sell-off.

Bank Indonesia also raised the overnight deposit facility rate by 50 bps to 5.25 percent and the lending facility rate by 25 bps to 7 percent.

The central bank already raised the key rate twice this year by a combined 75 bps in June and July before keeping it unchanged at its meeting on August 15.

It also signed a bilateral swap deal with the Bank of Japan worth USD12 billion that will allow the two central banks to borrow from each other’s foreign-exchange reserves.

Bank Indonesia Raises Rates

Joana Taborda |
8/29/2013 11:49:33 AM