JAKARTA, April 11 Indonesia's central bank held its benchmark interest rate at a record low 5.75 percent on Thursday, as forecast, as it sees inflationary pressures easing.
All 14 analysts polled by Reuters had expected the rate to be left unchanged even though headline inflation rose significantly in March, because core inflation - which doesn't include volatile food prices - eased that month and the government has not yet moved to cut fuel subsidies.
Four economists expected BI to tighten policy on Thursday or afterwards by raising its overnight deposit facility rate, or FASBI, by 25 basis points to lower a current account deficit and help the ailing rupiah.
Bank Indonesia last raised FASBI - the rate for funds that a bank can place with the central bank - in August, by 25 basis points.
Announcement date Rate (percent)
- Bank Indonesia cut its policy rate by 75 basis points in 2011, and by another 25 basis points in February 2012 to help maintain the country's annual economic growth at more than 6 percent.
- Headline inflation hit a nearly two-year high at 5.9 percent in March due to import restrictions on several foods, but core inflation softened to 4.21 percent from 4.29 percent the previous month.
- In 2012, Indonesia had a sizable current account deficit and its first annual trade deficit. The twin deficits put pressure on the rupiah, which weakened about 6 percent against the U.S. dollar during the year.
- There was a trade defict of $330 million in February, as global demand stayed weak amid surging imports.
- Forex reserves declined to $104.8 billion at the end of March from $105.2 billion in February, as Bank Indonesia intervened in the forex market to support the rupiah.
- Recent data releases show modest optimism about the economy. Retail sales in February were 14 percent higher than a year earlier, while a consumer confidence index was flat at 116.8 due to steady domestic consumption. (Reporting by Rieka Rahadiana and Adriana Nina Kusuma; Editing by Richard Borsuk and Neil Chatterjee)