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Jakarta Post

Indonesia sticks with 4.75% reference rate

Stefani Ribka (The Jakarta Post)
Jakarta
Fri, July 21, 2017

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Indonesia sticks with 4.75% reference rate Bank Indonesia governor Agus Martowardojo (file photo) (Antara/Muhammad Adimaja)

B

ank Indonesia (BI) has decided to maintain its "Seven-Day Reverse Repo Rate" at 4.75 percent for the ninth time in a row to preserve macro-economic stability amid global economic dynamics and local economic indicators.

"This is to support the recovery of our domestic economy. Local economic continue to recover but not as strong as previously expected, mainly due to slow consumption growth although, on the other hand, there’s an increase in investment […] and export,” said BI spokesman Arbonas Hutabarat after the central bank's board of governors meeting on Thursday.

BI’s deposit facility interest rate was also maintained at 4 percent, as well as the lending facility interest rate at 5.5 percent. The June Inflation was a record low of 0.69 percent month on month, due to weak demand and controlled food prices.

Investment was strong at US$4.3 billion in the second quarter and $9.6 billion accumulatively in the first half of the year, BI noted.

Indonesia booked a trade surplus of $3.5 billion in the second quarter,  thanks to non-oil and gas exports, which rose 6.8 percent year on year (yoy), while non-oil and gas imports grew by 4.9 percent.

The central bank projects better economic growth in the second half of the year upon higher consumption in July and global economic recovery expected to continue, especially in China and Europe.

The US economy, meanwhile, is projected to grow at a slower pace due to pending investment amid limited fiscal policy impacts and a possible fall in oil prices as a result of the global glut and limited demand. (ags)

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