The central bank of Indonesia (Bank Indonesia) left its benchmark interest rate (the BI 7-Day Reverse Repo Rate) unchanged at 5.75 percent at the October 2018 policy meeting (22-23 October). Meanwhile, the deposit facility and lending facility rates were kept at 5.00 percent and 6.50 percent, respectively.
In a statement Bank Indonesia said that this decision is consistent with its ongoing efforts to curtail the country's wide current account deficit, while maintaining the attractiveness of domestic financial markets, thereby bolstering external resilience in Indonesia against a backdrop of persistently high global uncertainty.
The decision to leave interest rates unchanged (after five rate hikes since May 2018 that were aimed at easing pressures on the rupiah exchange rate) was in line with our expectation. Since the second week of October the rupiah has been fairly stable against the US dollar, even slightly appreciating.
Based on the Bloomberg Dollar Index the Indonesian rupiah depreciated 0.03 percent to IDR 15,192 per US dollar on Tuesday (23/10). Meanwhile, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.11 percent to IDR 15,208 per US dollar.
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia
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Poll Indonesia Investments:
Where do you think the rupiah will be at the end of 2018?
Voting possible: -
- Above IDR 15,000 per US dollar (45.7%)
- IDR 14,500 - 15,000 per US dollar (26.3%)
- IDR 14,000 - 14,500 per US dollar (12.8%)
- IDR 13,500 - 14,000 per US dollar (5.8%)
- Below IDR 13,500 per US dollar (5%)
- No opinion (4.3%)
Total amount of votes: 600