Indonesia surprises with rate hike after weak trade data

Indonesia hiked interest rates again yesterday as weak trade data and a slumping currency prompted the central bank to boost borrowing costs for the sixth time this year.

Bank Indonesia surprised analysts as it raised the key lending rate by 25 basis points to 6.0 percent, its latest policy move as the country tries to shield the slumping rupiah.

Earlier Thursday, Indonesia reported a worse-than-expected $1.8 billion October trade deficit, putting pressure on the country's current account.

"This decision marks the central bank's further measures to strengthen efforts to reduce the current-account deficit to a safe level," bank governor Perry Warjiyo told reporters.

Indonesia has said it would slap higher taxes on imports and delay or restructure import-dependent infrastructure projects as part of a bid to tackle a growing deficit in the current account, a broad measure of its trade with the rest of the world.

 

Indonesia surprises with rate hike after weak trade data

Indonesia hiked interest rates again yesterday as weak trade data and a slumping currency prompted the central bank to boost borrowing costs for the sixth time this year. Bank Indonesia surprised analysts as it raised the key lending rate by 25 basis points to 6.0 percent, its latest policy move as the country tries to shield the slumping rupiah. Earlier Thursday, Indonesia reported a worse-than-expected $1.8 billion October trade deficit, putting pressure on the countrys current account. This decision marks the central banks further measures to strengthen efforts to reduce the current-account deficit to a safe level, bank governor Perry Warjiyo told reporters. Indonesia has said it would slap higher taxes on imports and delay or restructure import-dependent infrastructure projects as part of a bid to tackle a growing deficit in the current account, a broad measure of its trade with the rest of the world.