TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

BI holds rate, cautious on trade deficit

  • Esther Samboh

    The Jakarta Post

PREMIUM
Jakarta   /   Fri, August 10 2012   /  11:05 am

Indonesia’s central bank held its benchmark interest rate on Thursday at the record-low 5.75 percent, as expected, citing concerns over a current account deficit that could hurt investors’ confidence in the country’s assets, including the rupiah.

Weaker exports, followed by rising imports due to higher domestic demand despite the global slowdown, have created a deficit in Indonesia’s trade balance for three straight months, and its current account also suffered a deficit for a second consecutive quarter.

“The current account deficit increased in the second quarter of 2012, but it is forecast to decline in the second half of the year,” Bank Indonesia (BI) announced in a policy statement after a monthly meeting attended by the five-member board of governors.

The central bank has vowed to improve the current account deficit to a “sustainable” level by en...