Bank of Indonesia Raises Rates for Second Time in 2 Weeks

Indonesia’s central bank raised interest rates for the second time in as many weeks on Wednesday after its newly-appointed governor called an off-cycle monetary policy meeting, the Financial Times reported. The Bank of Indonesia increased its benchmark seven-day repo rate by 25 basis points to 4.75 per cent, after raising rates for the first time since 2014 in mid-May in a bid to prevent capital flight. In its mid-May statement, the bank highlighted that the move was designed to support the rupiah. The country’s currency has weakened by more than 3 per cent against the dollar in the year to date. The rupiah was flat after the announcement at 13,980 per dollar. Economists had forecast Wednesday’s increase on the back of new governor Perry Warjiyo’s pledge to stabilise the exchange rate. Read more. (Subscription required.)