BI holds rate despite seeing hawkish Fed stance
Bank Indonesia (BI) has kept its benchmark interest rate unchanged even though it expects the United States Federal Reserve to pursue a tight monetary policy.
Indonesia's central bank, BI, maintained its benchmark interest rate at 5.75 percent despite anticipating a tight monetary policy from the United States Federal Reserve. During the bank's monthly two-day policy meeting, BI Governor Destry Damayanti declared the rate would remain unchanged since June. She explained the global outlook as "higher for longer," due to the "high likelihood" of a rate hike from the Fed.
The decision was made a week before the Fed's scheduled meeting on October 27 and 28. A majority of interest rate traders, according to CME Group's FedWatch Tool, predict the Fed will keep its Federal Funds Rate unchanged during the upcoming meeting. However, most expect a 25-basis point increase at the December FOMC meeting. Indonesia's monetary authority has raised the interest rate three times, from May to June, by a total of 100 basis points, to curb the rapid depreciation of the rupiah amid global pressure on emerging market currencies.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
