Indonesia Leaves Monetary Policy Unchanged
At its May 8th, 2014 meeting, Bank Indonesia left the benchmark interest rate on hold at 7.5 percent, as widely expected. While saying the inflation remains under control, the central bank cut its 2014 growth outlook.
The deposit facility rate and the lending facility rate were also left unchanged at 5.75 percent and 7.50 percent, respectively.
The central bank cut its 2014 GDP growth forecasts to 5.1-5.5 percent from the previous 5.5-5.9 percent outlook, as exports struggle due to the mineral export ban. In the first quarter of 2014, the economy advanced 5.21 percent year-on-year, the slowest pace since 2009.
The current account deficit is expected to narrow in the first three months of 2014. Although exports dropped, non-oil/gas imports also declined. The current account to GDP ratio is expected to be around 2.06 percent in the first three months of 2014, lower than the 2.12 percent recorded in the previous quarter.
The 2014 inflation target was left unchanged at 3.5-5.5 percent.
5/8/2014 1:21:10 PM