Indonesian central bank hikes policy rate by 25 bps to 6%, sixth time this year

16, Nov. 2018

JAKARTA, NNA - Indonesia’s central bank on Thursday unexpectedly raised the key interest rate for a sixth time this year, hoping to guide the currency stronger, which would help narrow the trade deficit and attract more funds to rupiah-denominated assets from overseas.

The seven-day reverse repurchase rate was raised by 25 basis points to 6 percent.

“The decision reflects Bank Indonesia’s ongoing efforts to lower current account deficit within a manageable threshold,” the bank said. “The policy rate hike is also aimed at strengthening the attractiveness of domestic financial markets by anticipating global policy rate hike in the next few months.”