BI hints at steady rate through December<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The central bank has hinted that it will not raise interest rates
\nup until the year's end, even amid rising global rates,
\nsignifying once again its intention of maintaining a tight-biased
\nmonetary policy without sacrificing economic growth.<\/p>\n
Bank Indonesia (BI) Governor Burhanuddin Abdullah said on
\nWednesday that BI would refrain from raising its key interest
\nrate again despite the latest rate hike from the U.S. Federal
\nReserve.<\/p>\n
\"We will keep to our monthly schedule,\" he said.<\/p>\n
The Fed raised on Tuesday its benchmark interest rate by 25
\nbasis points (bps) to 4.25 percent, but indicated that this may
\nbe the last hike for a while.<\/p>\n
As with other central banks around the world, BI usually
\nfollows the Fed trend to keep the rupiah attractive against the
\nU.S. dollar. The central bank last hiked its BI rate by a lower-
\nthan-expected 50 bps to 12.75 percent earlier this month, its
\nsixth hike to tame inflation and support the rupiah.<\/p>\n
With an 8.5 percent difference between the BI rate and the Fed
\nrate, Burhanuddin explained that it would still be sufficient to
\nsupport the rupiah.<\/p>\n
\"This is among the highest differentials in our history,
\nalthough we will still await further developments,\" he said.<\/p>\n
BI's Board of Governors is slated to hold its monthly meeting
\nlater this month, and is due to also present its assessment of
\nthe Indonesian economy over the past year this Thursday.<\/p>\n
BI managed to take Rp 16.7 trillion (some US$1.69 billion)
\nfrom its one-month SBI promissory notes at a rate of 12.75
\npercent.<\/p>\n
Separately, BI Deputy Governor Aslim Tadjuddin said that the
\ncentral bank believed the rupiah could strengthen by some 3
\npercent, reiterating its forecast of a rate of between Rp 9,700
\nand Rp 9,800 per dollar by the year's end.<\/p>\n
\"The rupiah's real effective exchange rate is still some 97
\npercent,\" he said.<\/p>\n
The rupiah ended lower on Wednesday at Rp 9,795 against the
\ndollar from Tuesday's Rp 9,787 on what was believed to be
\nincreasing domestic demand for oil imports.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-hints-at-steady-rate-through-december-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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