Bank Indonesia forced to leave rate unchanged
(20 August 2015 – Indonesia) Indonesia’s central bank left its main interest rate steady for the sixth consecutive month, refraining from easing after the devaluation of China’s currency increased pressure on the rupiah.
Bank Indonesia (BI) governor Agus Martowardojo and the Board left the reference rate at 7.5 percent and the Fasbi – the rate it pays lenders on overnight deposits – at 5.5 percent.
The last time the bank moved the rate was a cut of 25 basis points in February.
As well as stress on the currency, Indonesia is experiencing a deep export slump that is hurting Southeast Asia’s biggest economy.
The monetary authority said it will guard the rupiah as the currency added to declines that have made it among Asia’s worst performers this year.
"Bank Indonesia's focus in the short term is directed at steps to maintain the stability of the rupiah amid continuing global economic uncertainty," the central bank said in a statement after its monthly board of governors' meeting.
The bank added that the board has agreed to tighten rules on foreign currency purchases as part of measures aimed at stabilizing the rupiah.
Anyone who purchases foreign currencies worth more than US$25,000 (A$34,056) per month must provide details to authorities, down from US$100,000 a month previously, central bank governor Agus Martowardojo told reporters.
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