Indonesia Maintains Rates on Hold
At its August 14th meeting, Bank Indonesia maintained its benchmark interest rate unchanged at 7.5 percent for the ninth consecutive month, as the current policy stance remained in line with efforts to bring inflation to the target range and lowered the current account deficit.
8/14/2014 8:59:13 AM
The central bank governor also said that current account deficit in the second quarter widened to 4.27 percent of the GDP from 2.06 percent in the previous quarter. Rising imports of consumer foods typically happened to meet expanding demand in the fasting month and ahead of Eid holidays.
The deposit facility and the lending facility rate were also left unchanged at 5.75 percent and 7.50 percent, respectively.
The central bank targets the inflation rate at 4.5 percent plus or minus 1 percent for 2014 and 4 percent plus or minus 1 percent for 2015. In July, the inflation rate eased to 4.5 percent, the slowest rate in eighteen months. The country’s GDP grew 5.12 percent in the second quarter of 2014, the lowest in five years as exports and spending government declined.