Jakarta. Bank Indonesia on Thursday decided to raise the benchmark interest rate by 50 points to 4.75 percent in a “preemptive measure” to tame inflation.

It was the third hike in three consecutive months, resulting in the highest interest rate since February 2020.

“We need to make sure that the core inflation will return to the targeted range of 3 percent -- plus/minus 1 percent -- in the first half of 2023," Bank Indonesia Governor Perry Warjiyo said, adding the current inflation is “overshooting” projection.

The inflation rate surged to 5.95 percent in September following the government’s decision to increase subsidized fuel prices.

The central bank already hiked the benchmark rate by 50 points in September and 25 points in August.

Perry said the latest hike is also meant to support measures in stabilizing the rupiah exchange rate in the face of a sharp strengthening of the dollar.