Indonesia c.bank holds interest rates

JAKARTA: Indonesia's central bank kept its key interest rate unchanged on Thursday, as expected, and said future policy decisions would depend on inflation and a stable rupiah currency amid rate rises by the U.S. Federal Reserve and other developed economies.

BI held the seven-day reverse repurchase rate at 4.25 percent for a third straight month. The deposit facility and lending facility rate were kept at 3.50 percent and 5.00 percent respectively. BI has cut the key rate twice this year, in August and September, surprising the market both times, in a bid to boost lending and economic growth.

The easing was facilitated by lower inflation rates. Room for further easings in 2018 looked "relatively limited", said Dody Budi Walujo, a senior BI official, highlighting the risks from expectations of further Fed rate hikes and normalisation of its balance sheet.

"We have to be careful as normalisation of monetary policy in developed countries will continue," Walujo told a briefing. Future rate decision would depend on Indonesia´s inflation remaining tame and the rupiah´s level against the dollar, he said.