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Jakarta Post

BI interest rate hike imminent

  • Marchio Irfan Gorbiano and Rachmadea Aisyah

    The Jakarta Post

Jakarta   /   Thu, May 17 2018   /  02:34 am

Bank Indonesia (BI) is expected to make good on its promise to end its expansionary monetary policy by raising its interest rate on Thursday in response to external pressures that have hit the rupiah hard, analysts have said.Following the rupiah’s recent depreciation, the central bank has sent a strong message that it has ample room to adjust the BI seven-day reverse repo rate if it deems the depreciation could harm its inflation target.In the last two years, the central bank has lowered its policy rate by 200 basis points to the current level of 4.25 percent as a stimulus to stir GDP growth. The current rate has stood unchanged since September 2017.The rupiah traded at Rp 14,094 per US dollar on Wednesday, according to the Jakarta Interbank Spot Dollar Rate (JISDOR), slightly depreciating from Rp 14,020 seen a day earlier and far from the Rp 13,400 seen at the beginning of the year.Ba...