Indonesia's central bank maintained its benchmark BI rate at 7.50 percent, as expected, and said it would continue to strengthen its monetary and macro prudential policy mix to contain risks that may cause disruptions to the stability of the macroeconomy and financial system.
Bank Indonesia (BI), which has maintained rates since November 2013, issued the following statement:
"The Board of Governors of Bank Indonesia convened on September 11th, 2014, decided to hold the BI rate at 7.50%, with Lending Facility and Deposit Facility rates to remain at 7.50% and 5.75%, respectively. Such policy is consistent with efforts to control inflation towards its target corridor of 4.5±1% in 2014 and 4.0±1% in 2015, as well as to reduce the current account deficit to a more sustainable level. Bank Indonesia perceives that the economic rebalancing process towards a more balanced economy is still continued, underpinned by preserved macroeconomic stability.
Looking ahead, there remains several risks that demands vigilance, that may cause disruptions of macroeconomic and financial system stability. To that end, Bank Indonesia will continue to strengthen its monetary and macroprudential policy mix, along with other policies to reinforce the structure of the domestic economy. Bank Indonesia will also enhance policy coordination with the government to control inflation and reduce the current account deficit in order to ensure that the economic rebalancing process will continue unimpeded, by maintaining a sustainable economic growth.