RHB | Indonesia | BI Held the Benchmark Rate Unchanged at 7.5%

Economic Research	12 September 2014
Indonesia
Economic Highlights
BI Held the Benchmark Rate Unchanged at 7.5% Bank Indonesia (BI) board of governors’ meeting decided to hold the BI rate unchanged at 7.5% on 11th Sept 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 of 3.5-4.5% and the current account deficit is projected to improve to a healthier level. The BI expects the economic growth to come in at the low end of its 5.1–5.5% forecast for 2014, and it believes the moderation is inevitable following its move to tighten monetary policy in 2H 2013 to stabilise the economy. Nevertheless, the BI expects government consumption to be revived to enhance economic growth in the 2H, though private consumption and investment are predicted to soften during the period. Meanwhile, the BI will continue to strengthen its monetary policy mix and coordination with the government in order to guard the economy from any challenges. Economist:  Luthfi Ridho  | +6221 2598 6888