Central Bank of Indonesia Maintains Benchmark Interest Rate at 7.50%
The central bank of Indonesia (Bank Indonesia/BI) left its benchmark interest rate (BI rate) unchanged at 7.50 percent in the Board of Governor's Meeting on Thursday (13/02/14). This decision was in line with market expectations as several economic indicators have improved. In recent days, the rupiah exchange rate has shown a marked improvement to IDR 12,055 per US dollar (Bloomberg Dollar Index) as pressures on Indonesia's current account balance are easing and Bank Indonesia's foreign exchange reserves are rising.
Indonesia's inflation is still high at 8.22 percent (year on year) but is expected to moderate in the next couple of months. Contrary to India, Turkey, Brazil and South Africa, Indonesia has not raised its interest rate yet this year to avert capital outflows.
Tomorrow (14/02), Bank Indonesia will release important balance of payments data.