Bank Indonesia Keeps Benchmark Rate at 4.75% to Maintain Stability


MAY 18, 2017

Jakarta. Indonesia's central bank on Thursday (18/05) kept its benchmark interest rate where it has been since October, saying its decision was in line with efforts to maintain stability at a time of recovery for Southeast Asia's largest economy.

Bank Indonesia (BI) held the 7-day reverse repurchase rate steady at 4.75 percent, as predicted by 19 of 20 analysts surveyed in a Reuters poll.

The central bank also kept the deposit facility and lending facility rates, which act as the floor and ceiling of the overnight inter-bank money market, unchanged at 4.00 percent and 5.50 percent, respectively.

Last year, BI slashed its benchmark six times, by a total of 150 basis points, switched its benchmark from the 12-month reference rate and eased some lending rules in a bid to help boost lending and economic growth.

Indonesia's central bank governor Agus Martowardojo said its policy stance remained neutral and that it was monitoring global risks ranging from the "big chance" of a rate hike in the United States in June to tension in the Korean peninsula.