Indonesia Leaves Rates on Hold
At its October 7th meeting, Bank Indonesia’s left the benchmark interest rate steady at 7.5 percent, saying the current policy stance is consistent with the inflation target. Policymakers left rate unchanged for the eleventh straight meeting, as widely expected.
10/7/2014 12:17:57 PM
The lending facility rate and the deposit facility rate were also left on hold at 7.5 percent and 5.75 percent, respectively.
Excerpt from the statement by the Bank Indonesia:
Such policy is consistent with efforts to control inflation towards its target corridor of 4.5±1% in 2014 and 4.0±1% in 2015, as well as to reduce the current account deficit to a more sustainable level. Although macroeconomic and financial system stability remain benign, Bank Indonesia maintains vigilance of several risks that emerge from domestic and external, such as contagion risk stemming from the normalization of the Federal Reserve policy as well as possibilities for adjustment of administered prices. To that end, Bank Indonesia will continue to strengthen its monetary and macroprudential policy mix in order to ensure the preserve macroeconomic and financial system stability that supports economic sustainability. Furthermore, Bank Indonesia will also strengthen policy coordination with the government to control inflation and reduce the current account deficit, in order to ensure a smooth economic rebalancing process so that sustainable economic growth could be maintained.