Indonesia holds key interest rate as economy stabilises
JAKARTA (AFP) - Indonesia's central bank held its benchmark interest rate at 7.50 per cent on Thursday after tentative signs that Southeast Asia's biggest economy is back on track following recent turmoil.
Bank Indonesia has lifted rates by 175 basis points since June as the rupiah and stocks plunged due to foreign investors withdrawing funds on fears the United States was going to reduce its stimulus programme.
But the bank stood pat at its December meeting after data showed inflation - which surged after a fuel price hike - stabilising, the trade balance returning to surplus and the current account deficit narrowing.
The decision to hold the rate was in line with economists' expectations.