Indonesia raises rates for 2nd straight month

Indonesia raises rates for 2nd straight month

JAKARTA: Indonesia’s central bank increased interest rates by more than expected on Thursday as it searched for to control inflation after the government raised energy prices earlier this particular month.

Financial institution Indonesia (BI) raised the 7-day reverse repurchase rate simply by 50 basis points to 4. 25%. Out of 30 economists polled by Reuters, 27 had anticipated a 25 basis point move, while the remaining three had bet on a bigger 50 basis point rate hike.

The bank also hiked the overnight deposit facility and lending facility rates from the same amount to three or more. 50% and 5. 00%, respectively.

The rate decision comes after the government raised gasoline prices by about 30% earlier this month.

In August, Indonesia’s central financial institution raised rates for the first time since 2018 since inflation hovered near its highest amounts in seven many years.

The inflation rate eased over expected in Aug, but , at four. 69%, it was above BI’s 2% in order to 4% target range for a third straight month.

Several economists predicted the particular fuel price hike will push pumpiing up to around 6% by the end of this year. – Reuters