Indonesian central bank on Thursday kept its benchmark interest rate steady, a day after the U.S. Federal Reserve ratcheted up its fund rate as the Indonesian lender has taken position ahead of the curve.
The rate-setting meeting of the central bank, Bank Indonesia, decided to hold seven-day reserve repo rate at 6 percent after the U.S. Fed fund rate was edged up 25 basis points for the fourth time this year on Wednesday night, Governor of the Indonesian Central Bank Perry Warjiyo said.
“Bank Indonesia is confident that the policy is in line with efforts to keep domestic financial market attractive, and is taken by considering the trend of the global rate in several months ahead,” he said.
The bank also kept the deposited facility rate and lending facility rate steady at 5.25 percent and 6.75 percent respectively.
Previously on Nov. 15, the central bank took a preemptive measure by drifting higher up its benchmark interest rate of 25 basis points to 6 percent in anticipating the Fed Fund rate hike this month.
It also applied a tightening policy by rising a 175 basis points rate on May 17 to help pare down risks of capital outflows.