Indonesia’s central bank held its main interest rate unchanged for a fourth straight policy review on Wednesday, but hiked the deposit facility rate, as the country’s stock market saw a record-breaking two-day rout and its rupiah currency hovered near an all-time low.
Bank Indonesia kept the benchmark 7-day reverse repurchase rate (IDCBRR=ECI), opens new tab at 5.75%, as expected by 15 of 29 economists in a Reuters poll. The rest had expected a hike of at least 25 basis points to stem the selloff.
The central bank hiked its overnight deposit (IDCBID=ECI), opens new tab by 25 bps to 5.00% and kept the lending facility rates (IDCBIL=ECI), opens new tab unchanged at 6.50%.
BI raised rates by 100 basis points in three moves between May and June to defend the rupiah. The currency has come under renewed pressure in recent days after a selloff triggered by a warning last week from MSCI that it could relegate Indonesian equities to “standalone” market status.
Source: Reuters