“Indonesia kept its benchmark interest rate unchanged for a 12th meeting as a depreciating currency and inflationary pressures reduce scope for an addition of monetary stimulus to spur a slowing economy.
Bank Indonesia Governor Darmin Nasution and his board held the reference rate at a record-low 5.75 percent, the central bank said in Jakarta today. The decision was predicted by all 17 economists surveyed by Bloomberg News.
Southeast Asia’s largest economy is facing rising price pressures from higher power tariffs, an increase in minimum wages and as a weakening rupiah raises the cost of imported goods. At the same time, the economy grew at the slowest pace in more than two years last quarter as an export slump countered gains in domestic consumption.
“The current rate is friendly for capital markets, bonds and to support growth,” Branko Windoe, head of treasury at PT Bank Central Asia, said after the decision. “By keeping the rate, Indonesian 10-year bonds are more attractive compared to other countries. Indonesia remains an investment destination and it will have a positive impact on the rupiah.”
The government’s 11 percent notes due October 2014 advanced, pushing the yield down by three basis points, or 0.03 percentage point, to 4.40 percent as of 3:24 p.m. in Jakarta, prices from the Inter Dealer Market Association show. That was the biggest drop since Feb. 6….”
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