Following a two-day board of governors meeting, the central bank announced on Thursday that it had kept its policy rate -- the seven-days reverse repo rate -- at 6 percent. Deposit and lending facility rates were also maintained at 5.25 and 6.75 percent, respectively.

BI Governor Perry Warjiyo said the decision was consistent with efforts by the central bank and the government to stabilize the economy, adding that BI would monitor the latest development in Indonesia’s balance of payment accounts.

“Seasonally, there were tendencies of a widening current account [deficit] in the second quarter thanks to [external] debt interest payments and dividend repatriation,” said Perry in Jakarta on Thursday, adding that BI’s decision to hold its rates were made to ensure that Indonesia would “continue to record a balance of payment surplus going forward”.

Aside from holding its rates, the central bank also announced several policies to give it more room to boost growth in domestic demand.

The policies include holding foreign exchange swap and repo term auctions more frequently --effective from May 6 -- lowering the cost of its National Clearance System (SKNBI), as well as erasing the provision for Domestic Non-Deliverable Forward (DNDF) with transaction values up to US$5 million.

Perry said BI was drafting a regulation for market operators in the domestic money and foreign exchange markets to increase transaction efficiencies in the market, as well as developing a commercial securities market as an alternative source for short-term funding for corporations.

BI will also continue to encourage more electronic transactions by rolling out programs through various government programs such as the non-cash food assistance program (BPNT), among others. (bbn)

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