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Indonesia holds interest rates steady

by ChemOrbis Editorial Team -
  • 17/11/2015 (16:32)
According to media reports, Indonesia’s Central Bank, Bank Indonesia, held its main rates unchanged on November 17 at 7.50%, keeping interest rates steady for a ninth consecutive month. Bank Indonesia’s decision not to change its interest rates was in line with analysts’ expectations, according to a survey conducted by Bloomberg.

However, the bank cut the primary reserve requirement for lenders to 7.5 percent from 8 percent, effective as of December 1.

The bank aims to avoid further depreciation of the rupiah by keeping rates steady as any rate increase from the US Federal Reserve’s (Fed’s) meeting in December will put additional downward pressure on the currency.

The Indonesian government expects to see a growth rate of 4.8% at most this year, which represents the slowest growth seen since 2009. However, the government predicts that economic growth accelerate to 5.2% to 5.6% in 2016. Indonesia’s inflation rate declined to 6.25% in October, the slowest rate this year, although it is still above the central bank’s target for 2015, which ranges between 3% and 5%.
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