Indonesian central bank holds rate unchanged

GMT 13:21 2014 Thursday ,11 September

Arab Today, arab today Indonesian central bank holds rate unchanged

Indonesian central bank
Jakarta - XINHUA

The Indonesian central bank on Thursday held its benchmark interest rate steady to anticipate possible widening of current account deficit as the bank watches closely on possible hike of subsidized fuel prices in coming months.
The bank's governor board meeting on Thursday decided to keep the basic rate at 7.5 percent despite low inflation and weakening economic growth, the bank said in a statement.
Newly-elected President Joko Widodo plans to raise subsidized- fuel prices in October or November to ease budget constrain by scaling down a huge fuel import that would allow more funds to be set aside for building roads, bridges, seaport and airports, health facilities and other infrastructure facilities.
Indonesia is a net-oil importer country and provides a huge oil subsidy.
Despite the country's trade performance swung into a small surplus of 123.7 million U.S. dollar in July, the country's export remained declining in the month due to weakening global demand, the surplus was more caused by the steeper decline in imports.
Indonesia's current account gap in the second quarter widened to 4.27 percent of the GDP or 9.1 billion U.S. dollars, the highest since 2009.
The government expects rupiah at the ranges of 11,500 to 11,600 per one U.S. dollar this year.
Indonesia's consumer index accelerated at slower pace at 3.99 percent in August from 4.53 percent in July, the national statistic bureau announced here on Monday.
Should Jokowi, nickname of Joko Widodo, rise the fuel price, inflation may exceed the central bank target of 3.5 to 5.5 percent this year.
Indonesia's GDP weakened to 5.12 percent at three months through June, slowing from 5.21 at the first quarter, according to the national statistic bureau.
The government expects the economy to grow by 5.2 to 5.3 percent this year, easing from 5.78 percent last year.
On Thursday, the bank also kept both the "FASBI rate" ( overnight deposit facility rate and lending facility rate on hold at 5.75 percent and 7.5 percent respectively.

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بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
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