Bank Indonesia raises interest rate to 7.25%
In a bid to stop the slump of the country’s currency, Indonesia’s central bank on September 12 decided to raise the interbank interest rate by 25 basis points to 7.25 per cent.
“This action forms part of the follow-up measures taken to reinforce the policy mix instituted by Bank Indonesia, which focuses on controlling inflation, stabilising the rupiah exchange rate and ensuring the current account deficit is managed to a sustainable level,” the central bank said in an emailed statement.
It added that these policies, “accompanied by the array of policies implemented previously,” will expedite reductions in the current account deficit and bring the rate of inflation down to its target corridor of 4.5 (±1) per cent in 2014.
Bank Indonesia also revised down its projection for domestic economic growth in 2013 to 5.5 to 5.9 per cent from 5.8 to 6.2 per cent previously. Surveys indicate that household consumption in Indonesia will tend to decelerate during the second half of 2013.
Several investment indicators, like imports of capital goods, heavy equipment sales and electricity consumption in the manufacturing sector, all confirm that non-construction investment will suffer a contraction. Externally, real exports are expected to improve amid lower export commodity prices from Indonesia.
The central bank has also revised its economic growth projection for 2014 down from 6.0 to 6.4 per cent previously to 5.8 to 6.2 per cent on the back of a weaker global economic outlook.
In a bid to stop the slump of the country's currency, Indonesia's central bank on September 12 decided to raise the interbank interest rate by 25 basis points to 7.25 per cent. "This action forms part of the follow-up measures taken to reinforce the policy mix instituted by Bank Indonesia, which focuses on controlling inflation, stabilising the rupiah exchange rate and ensuring the current account deficit is managed to a sustainable level," the central bank said in an emailed statement. It added that these policies, "accompanied by the array of policies implemented previously," will expedite reductions in the current account...
In a bid to stop the slump of the country’s currency, Indonesia’s central bank on September 12 decided to raise the interbank interest rate by 25 basis points to 7.25 per cent.
“This action forms part of the follow-up measures taken to reinforce the policy mix instituted by Bank Indonesia, which focuses on controlling inflation, stabilising the rupiah exchange rate and ensuring the current account deficit is managed to a sustainable level,” the central bank said in an emailed statement.
It added that these policies, “accompanied by the array of policies implemented previously,” will expedite reductions in the current account deficit and bring the rate of inflation down to its target corridor of 4.5 (±1) per cent in 2014.
Bank Indonesia also revised down its projection for domestic economic growth in 2013 to 5.5 to 5.9 per cent from 5.8 to 6.2 per cent previously. Surveys indicate that household consumption in Indonesia will tend to decelerate during the second half of 2013.
Several investment indicators, like imports of capital goods, heavy equipment sales and electricity consumption in the manufacturing sector, all confirm that non-construction investment will suffer a contraction. Externally, real exports are expected to improve amid lower export commodity prices from Indonesia.
The central bank has also revised its economic growth projection for 2014 down from 6.0 to 6.4 per cent previously to 5.8 to 6.2 per cent on the back of a weaker global economic outlook.
