JAKARTA Jan 10 Indonesia's central bank kept
its benchmark policy rate unchanged as expected on Thursday, at
a record low of 5.75 percent for the 12th month, with inflation
relatively low and economic growth still strong despite global
All 17 economists polled by Reuters had expected the policy
rate to be left unchanged to support Southeast Asia's largest
economy, as it faces current account and trade deficits which
are adding fresh pressure to the already weakened rupiah.
Three economists expected Bank Indonesia (BI) to start
raising the benchmark rate from June in response to inflation
risks, but most saw no increase until after the first year.
However, most economists expected BI to start raising the
deposit facility rate, or FASBI, in the first half from the
current level of 4 percent.
December annual inflation softened to 4.3 percent, from 4.32
percent a month earlier, well within central bank's target range
of 3.5-5.5 percent last year.
The government expected the economy to expand by 6.3 percent
in 2012 on buoyant domestic demand and investment. However, weak
demand from major trade partners have hit the country's exports,
resulting in a trade deficit of $480 million in November.
Announcement date Rate (percent)
Bank Indonesia's last rate cut was 25 basis points (bps) in
February 2012, following 75 bps of cuts in 2011.
While the economy showed resilience in the face of the
global downturn last year, recent economic data indicates
Indonesian consumers are growing less confident due to concerns
over jobs and wages. Retail sales grew at a slower pace in
November despite discounting by stores ahead of the holiday
Growth of broad money supply, or M2, slowed in November to
17.4 percent from a year ago, according to data from Bank
The rupiah has weakened more than 1 percent against
the dollar this year, after falling nearly 6 percent last year.
- BI rate details ..........................
- Central bank website ............... www.bi.go.id
(Reporting by Rieka Rahadiana and Adriana Nina Kusuma; Editing
by Neil Chatterjee)