RHB | Indonesia | BI Held the Benchmark Rate Unchanged at 7.5%, CAD Recorded At 4.3% Of GDP

Economic Research	15 August 2014
Indonesia
Economic Highlights
BI Held the Benchmark Rate Unchanged at 7.5%, CAD Recorded At 4.3% Of GDP Bank Indonesia (BI) board of governors’ meeting decided to hold the BI rate unchanged at 7.5% on 14th August 2014. Similarly, the lending facility and the deposit facility rates were also kept unchanged at 7.5% and 5.75%, respectively. This was the tenth consecutive month the BI kept its key policy rate stable, as the current monetary policy stance is consistent with the target of achieving an inflation rate at 3.5-4.5% and the current account deficit is projected to improve to a healthier level. Although economic growth moderated in the 2Q, BI viewed it as a consequence to achieve a macroeconomic stability in the country. As it stands, domestic demand remained resilient accompanied with declining inflation trend. The BI expects the economic growth will likely come in at the low end of the 5.1–5.5% forecast for 2014.  Economist:  Luthfi Ridho  | +6221 2598 6888