Indonesia’s central bank surprises with ‘pre-emptive’ rate hike to cushion falling rupiah
In a rare forecast, Bank Indonesia’s governor says he expects the rupiah to strengthen to 16,000 over the next quarter and 15,800 by 4Q this year
INDONESIA’S central bank defied majority expectations with a hawkish stance, raising its key interest rate on Wednesday (Apr 24) to support the battered rupiah, which has reached four-year lows on the back of a rallying US dollar.
The central bank hiked the benchmark seven-day reverse repurchase rate by 25 basis points to 6.25 per cent – its first hike this year and its eighth since the bank began a tightening cycle in 2022.
The overnight deposit facility and lending facility rates were similarly raised by 25 basis points to 5.5 per cent and 7 per cent, respectively.
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