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Bank Indonesia maintains key rate at 6 percent
Bank Indonesia (BI) maintained on Thursday its policy rate at 6 percent despite the United States Federal Reserve’s decision to increase its benchmark rate by 25 basis points to a range of 2.25 to 2.5 percent.
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Bank Indonesia Governor Perry Warjiyo (Antara/Muhammad Adimaja)
B
ank Indonesia (BI) maintained on Thursday its policy rate at 6 percent despite the United States Federal Reserve’s decision to increase its benchmark rate by 25 basis points to a range of 2.25 to 2.5 percent.
BI also maintained its lending and deposit facilities at 6.75 percent and 5.25 percent, respectively.
“Although the Fed has increased its Fed Fund Rate, we decided to maintain the seven-day reverse repo rate as we had anticipated the move,” BI Governor Perry Warjiyo said during a press briefing in Jakarta.
Perry added that the current reference rate was still consistent with the central bank’s effort to lower the country’s current account deficit and maintain the country’s attractiveness.
BI has raised its key rate six times to a total of 175 bps as a way to stabilize the rupiah amid high volatility in the global market since May.
The hike was also aimed at attracting foreign investors back to Indonesia following the US’ exponential economic growth and 10-year treasury yield increase.
The effort seemed to work as BI recorded that Indonesia had received capital inflow of US$7.9 billion in November. (bbn)
