Key facts
- Benchmark rate held at 5.75% for fourth consecutive review.
Indonesia central bank holds key rate, hikes deposit facility rate
IN SHORT
Bank Indonesia held its benchmark 7-day reverse repurchase rate at 5.75% for a fourth straight policy review on Wednesday. The central bank also hiked its overnight deposit rate by 25 basis points to 5.00%. The decisions come as Indonesia's stock market experienced a record two-day rout and its rupiah currency hovered near an all-time low.
Key Numbers
5.75%Bank Indonesia benchmark 7-day reverse repurchase rate
5.00%Overnight deposit facility rate
6.50%Lending facility rate
25basis points hike in deposit facility rate
100basis points raised between May and June
Who's Involved
Bank Indonesia
central bank that held its main interest rate unchanged
MSCI
warned it could relegate Indonesian equities to "standalone" market status
↳ Why This Matters
Bank Indonesia's decision to hold its key rate while hiking the deposit facility rate signals a nuanced approach to managing inflation and currency stability amidst market turmoil. The central bank's actions are closely watched by investors and could influence foreign capital flows into Southeast Asia's largest economy.